Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
The company's cash conversion weakened this quarter as free cash flow and margin declined compared to both the prior quarter and the same quarter last year. Revenue was stable sequentially and higher year over year, but operating cash flow fell, driving the lower free cash flow.
- Revenue was stable compared to the prior quarter and higher than a year ago, while operating cash flow was lower than both periods. Capital expenditure was slightly higher than the prior quarter and the year-ago period, resulting in free cash flow that was lower and a free cash flow margin that declined. The filing notes that the company relies on operating cash flows for liquidity and capital allocation.
- Compared to the immediately preceding quarter, operating cash flow, free cash flow, and margin were all lower, while capital expenditure was slightly higher and revenue was stable. Versus the same quarter one year earlier, revenue was higher but operating cash flow, free cash flow, and margin were lower, with capital expenditure slightly higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.6B
Trailing twelve-month free cash flow.
Quarter free cash flow
$437.3M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$599.5M
Cash generated by operations before capital spending.
CapEx
$162.2M
Capital spending and related asset purchases.
FCF margin
19.1%
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 | $2.3B | $568.1M | $167.9M | $400.2M | 17.5% |
| 2022-09-30 | $2.3B | $336.4M | $139.3M | $197.0M | 8.6% |
| 2022-12-31 | $2.3B | $709.5M | $152.3M | $557.2M | 24.7% |
| 2023-03-31 | $2.3B | $599.5M | $162.2M | $437.3M | 19.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -3961.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 7.1% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$15.8B | 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 Decline
Operating cash flow decreased compared to both the prior quarter and the same quarter last year, while revenue remained stable or increased. This decline occurred despite revenue being higher year over year and stable sequentially.
The lower operating cash flow directly reduced free cash flow and compressed the free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was stable compared to the prior quarter and higher than a year ago, while operating cash flow was lower than both periods. Capital expenditure was slightly higher than the prior quarter and the year-ago period, resulting in free cash flow that was lower and a free cash flow margin that declined. The filing notes that the company relies on operating cash flows for liquidity and capital allocation.
Compared to the immediately preceding quarter, operating cash flow, free cash flow, and margin were all lower, while capital expenditure was slightly higher and revenue was stable. Versus the same quarter one year earlier, revenue was higher but operating cash flow, free cash flow, and margin were lower, with capital expenditure slightly higher.
Monitor the trend in operating cash flow generation relative to revenue, as the decline in operating cash flow was the primary observable factor behind the lower free cash flow.