Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow improved sequentially but weakened significantly compared with the same quarter last year. The company noted its strong liquidity position and capital deployment priorities in the filing.
- Revenue was stable from the prior quarter and higher year over year. Operating cash flow increased from the previous quarter but was markedly lower than a year ago, and after higher capital expenditure, free cash flow and margin followed the same pattern.
- Compared with the preceding quarter, free cash flow and margin improved due to stronger operating cash flow. Versus the year-ago quarter, both measures declined substantially as operating cash flow fell and capital expenditure rose.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$741.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
$142.3M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$259.5M
Cash generated by operations before capital spending.
CapEx
$117.2M
Capital spending and related asset purchases.
FCF margin
2.4%
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 | $5.7B | $453.6M | $91.0M | $362.6M | 6.4% |
| 2022-12-31 | $5.5B | $222.4M | $95.6M | $126.7M | 2.3% |
| 2023-03-31 | $5.8B | $197.5M | $88.1M | $109.4M | 1.9% |
| 2023-06-30 | $5.9B | $259.5M | $117.2M | $142.3M | 2.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 41.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.0% | 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.
Decline in Operating Cash Flow Compared to Last Year
The strongest observable driver is the sharp drop in operating cash flow relative to the same quarter last year, despite higher revenue. This was the primary factor behind the lower free cash flow.
A sustained recovery in operating cash flow would be required to restore free cash flow to prior-year levels.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was stable from the prior quarter and higher year over year. Operating cash flow increased from the previous quarter but was markedly lower than a year ago, and after higher capital expenditure, free cash flow and margin followed the same pattern.
Compared with the preceding quarter, free cash flow and margin improved due to stronger operating cash flow. Versus the year-ago quarter, both measures declined substantially as operating cash flow fell and capital expenditure rose.
Monitor the trend in capital expenditure, which has increased both quarter over quarter and year over year, potentially pressuring free cash flow.