Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
In the current quarter, free cash flow and its margin were lower than both the prior quarter and the same quarter last year, reflecting a weaker cash conversion despite stable revenue. The decline in operating cash flow was the primary driver, while capital expenditure was also lower.
- Revenue was higher than the prior quarter and stable compared to a year ago. Operating cash flow, however, was lower than both periods, leading to a lower free cash flow and a narrower free cash flow margin.
- Free cash flow and margin declined from the prior quarter and from the same quarter one year earlier. Operating cash flow was lower in both comparisons, while capital expenditure was also lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$3.2B
Trailing twelve-month free cash flow.
Quarter free cash flow
$632.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$653.0M
Cash generated by operations before capital spending.
CapEx
$21.0M
Capital spending and related asset purchases.
FCF margin
25.6%
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 | $2.4B | $969.0M | $34.0M | $935.0M | 38.7% |
| 2022-09-30 | $2.4B | $737.0M | $55.0M | $682.0M | 28.6% |
| 2022-12-31 | $2.4B | $1.1B | $100.0M | $992.0M | 41.7% |
| 2023-03-31 | $2.5B | $653.0M | $21.0M | $632.0M | 25.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 96.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.8% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$16.1B | 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
Operating cash flow was lower than the prior quarter and the year-ago quarter, despite revenue being higher than the prior quarter and stable year-over-year. This drove the reduction in free cash flow.
The lower operating cash flow weakened the overall cash conversion efficiency.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher than the prior quarter and stable compared to a year ago. Operating cash flow, however, was lower than both periods, leading to a lower free cash flow and a narrower free cash flow margin.
Free cash flow and margin declined from the prior quarter and from the same quarter one year earlier. Operating cash flow was lower in both comparisons, while capital expenditure was also lower.
Monitor the trajectory of operating cash flow, as the filing notes an increase in interest expense related to acquisition debt and refinancing.