Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow in the current quarter was stable compared to the same quarter one year earlier, aided by lower capital expenditure, but declined from the immediately preceding quarter as operating cash flow fell. The free cash flow margin improved slightly year over year, reflecting disciplined capital spending.
- Operating cash flow was lower than both the immediately preceding quarter and the same quarter one year earlier, while capital expenditure also decreased, resulting in free cash flow that matched the year-ago level. The free cash flow margin improved year over year as revenue declined less than operating cash flow.
- Compared to the immediately preceding quarter, revenue and operating cash flow were lower, leading to a lower free cash flow margin. Versus the same quarter one year earlier, free cash flow was stable with an improved margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$8.4B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.6B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.7B
Cash generated by operations before capital spending.
CapEx
$109.0M
Capital spending and related asset purchases.
FCF margin
25.7%
The share of revenue converted into free cash flow.
Cash flow trend
A short quarterly history shows whether FCF is scaling with revenue or only spiking for one period.
| Period | Revenue | Operating CF | CapEx | FCF | FCF margin |
|---|---|---|---|---|---|
| 2022-06-30 | $6.3B | $1.8B | $143.0M | $1.7B | 26.5% |
| 2022-09-30 | $7.0B | $2.9B | $157.0M | $2.7B | 38.4% |
| 2022-12-31 | $7.4B | $2.6B | $181.0M | $2.4B | 32.3% |
| 2023-03-31 | $6.4B | $1.7B | $109.0M | $1.6B | 25.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 161.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.7% | Lower capital intensity usually supports FCF margin. |
| Net cash | n/a | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Operating Cash Flow Generation
The decline in operating cash flow both sequentially and year over year was driven by lower collections and higher inventory and operating items, as noted in the filing. This offset the benefit from reduced capital spending on free cash flow.
If this trend persists, free cash flow may face downward pressure even if capital expenditure remains lower.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow was lower than both the immediately preceding quarter and the same quarter one year earlier, while capital expenditure also decreased, resulting in free cash flow that matched the year-ago level. The free cash flow margin improved year over year as revenue declined less than operating cash flow.
Compared to the immediately preceding quarter, revenue and operating cash flow were lower, leading to a lower free cash flow margin. Versus the same quarter one year earlier, free cash flow was stable with an improved margin.
Monitor the trajectory of operating cash flow given the company attributed the year-over-year decline to lower collections and higher inventory and operating items.