Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue grew slightly sequentially and year over year, while operating cash flow improved more sharply, leading to a higher free cash flow margin. The strengthened cash conversion reflects a larger portion of revenue being converted into free cash flow compared to both the prior quarter and the same quarter last year.
- Free cash flow margin expanded to over a third of revenue, as operating cash flow growth more than offset a modest increase in capital spending. The company converted a higher share of revenue into free cash flow this quarter relative to the preceding quarter and the year-ago quarter.
- Compared to the prior quarter, free cash flow rose significantly, driven by higher operating cash flow despite a slight increase in capital expenditure. Year over year, free cash flow also improved, with operating cash flow up and capital expenditure slightly lower; the filing notes that the six-month operating cash flow increase was influenced by a prior-year non-recurring payment.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$8.9B
Trailing twelve-month free cash flow.
Quarter free cash flow
$2.2B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$2.3B
Cash generated by operations before capital spending.
CapEx
$139.0M
Capital spending and related asset purchases.
FCF margin
33.3%
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 |
|---|---|---|---|---|---|
| 2022-09-30 | $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% |
| 2023-06-30 | $6.6B | $2.3B | $139.0M | $2.2B | 33.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 210.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.1% | 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 Improvement
Operating cash flow increased notably from both the prior quarter and the same quarter last year, providing the primary uplift to free cash flow.
Higher operating cash flow directly boosted free cash flow and expanded the free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Free cash flow margin expanded to over a third of revenue, as operating cash flow growth more than offset a modest increase in capital spending. The company converted a higher share of revenue into free cash flow this quarter relative to the preceding quarter and the year-ago quarter.
Compared to the prior quarter, free cash flow rose significantly, driven by higher operating cash flow despite a slight increase in capital expenditure. Year over year, free cash flow also improved, with operating cash flow up and capital expenditure slightly lower; the filing notes that the six-month operating cash flow increase was influenced by a prior-year non-recurring payment.
Capital expenditure level, which increased sequentially, can influence future free cash flow generation.