Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue declined compared to both the prior quarter and the same quarter last year, yet free cash flow and free cash flow margin improved substantially. Operating cash flow rose sharply, driving the higher free cash flow despite a moderate increase in capital expenditure.
- Operating cash flow was significantly higher than revenue would suggest, resulting in a free cash flow margin that was substantially higher than the prior quarter and improved from the year-ago period. Capital expenditure remained a small portion of operating cash flow.
- Compared to the immediately preceding quarter, revenue was lower but operating cash flow and free cash flow were higher, leading to a much stronger free cash flow margin. Versus the same quarter one year earlier, revenue was slightly lower while operating cash flow and free cash flow were higher, with an improved margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$3.4B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.1B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.2B
Cash generated by operations before capital spending.
CapEx
$40.0M
Capital spending and related asset purchases.
FCF margin
47.6%
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 |
|---|---|---|---|---|---|
| 2022-09-30 | $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% |
| 2023-06-30 | $2.3B | $1.2B | $40.0M | $1.1B | 47.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 139.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.7% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$15.3B | 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 Strength
Operating cash flow rose sharply relative to revenue, more than offsetting a modest increase in capital expenditure. This drove free cash flow to a higher level despite lower revenue.
The improved cash conversion resulted in a free cash flow margin that was higher than both the prior quarter and the year-ago quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow was significantly higher than revenue would suggest, resulting in a free cash flow margin that was substantially higher than the prior quarter and improved from the year-ago period. Capital expenditure remained a small portion of operating cash flow.
Compared to the immediately preceding quarter, revenue was lower but operating cash flow and free cash flow were higher, leading to a much stronger free cash flow margin. Versus the same quarter one year earlier, revenue was slightly lower while operating cash flow and free cash flow were higher, with an improved margin.
Monitor the trend in capital expenditure, which increased from both the prior quarter and the year-ago quarter.