Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow margin was minimal, reflecting a significant deterioration from both the prior quarter and the same quarter last year. Cash conversion was weak as operating cash flow declined sharply while capital spending increased.
- Operating cash flow fell substantially from both the previous quarter and the year-ago quarter, while capital expenditure rose compared to the prior year. As a result, free cash flow was near zero despite revenue remaining broadly stable.
- Compared to the immediately preceding quarter, free cash flow and its margin weakened considerably, driven by lower operating cash flow and slightly higher capital expenditure. Versus the same quarter one year earlier, the decline was even steeper due to both lower operating cash flow and much higher capital expenditure.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$844.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
$4.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$345.0M
Cash generated by operations before capital spending.
CapEx
$341.0M
Capital spending and related asset purchases.
FCF margin
0.1%
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 | $5.4B | $390.0M | $186.0M | $204.0M | 3.8% |
| 2022-09-30 | $5.4B | $435.0M | $238.0M | $197.0M | 3.6% |
| 2022-12-31 | $5.1B | $761.0M | $322.0M | $439.0M | 8.6% |
| 2023-03-31 | $5.0B | $345.0M | $341.0M | $4.0M | 0.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 2.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 6.8% | 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.
Weakened Cash Generation and Higher Spending
Operating cash flow decreased while capital expenditure increased, causing free cash flow to shrink dramatically. This combination was the strongest observable driver of the quarter's minimal free cash flow.
If this pattern continues, free cash flow may remain constrained.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow fell substantially from both the previous quarter and the year-ago quarter, while capital expenditure rose compared to the prior year. As a result, free cash flow was near zero despite revenue remaining broadly stable.
Compared to the immediately preceding quarter, free cash flow and its margin weakened considerably, driven by lower operating cash flow and slightly higher capital expenditure. Versus the same quarter one year earlier, the decline was even steeper due to both lower operating cash flow and much higher capital expenditure.
Monitor the trajectory of capital expenditure relative to operating cash flow, as elevated spending combined with lower cash generation could pressure free cash flow.