Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow and margin improved significantly from the prior quarter but were higher than the same quarter a year ago. The cash conversion rate strengthened as operating cash flow rose while capital spending declined sequentially.
- Revenue was lower than both the prior quarter and the year-ago quarter, yet operating cash flow was higher than both periods, leading to a stronger free cash flow margin. Capital expenditure was lower than the preceding quarter but higher than the same quarter last year, resulting in free cash flow that was higher than both comparative periods.
- Compared with the prior quarter, revenue decreased while operating cash flow increased, capital expenditure decreased, and free cash flow improved substantially. Relative to the same quarter a year ago, revenue was lower, operating cash flow and capital expenditure were higher, and free cash flow was higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$901.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
$261.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$528.0M
Cash generated by operations before capital spending.
CapEx
$267.0M
Capital spending and related asset purchases.
FCF margin
5.6%
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 | $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% |
| 2023-06-30 | $4.7B | $528.0M | $267.0M | $261.0M | 5.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 111.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 5.7% | 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.
Operating Cash Flow Growth
Operating cash flow was higher than both the prior quarter and the same quarter last year, even as revenue declined. The improvement in cash generation from operations, combined with a sequential reduction in capital spending, drove free cash flow higher.
The free cash flow margin increased compared to both the prior quarter and the year-ago quarter, reflecting a stronger cash conversion rate.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was lower than both the prior quarter and the year-ago quarter, yet operating cash flow was higher than both periods, leading to a stronger free cash flow margin. Capital expenditure was lower than the preceding quarter but higher than the same quarter last year, resulting in free cash flow that was higher than both comparative periods.
Compared with the prior quarter, revenue decreased while operating cash flow increased, capital expenditure decreased, and free cash flow improved substantially. Relative to the same quarter a year ago, revenue was lower, operating cash flow and capital expenditure were higher, and free cash flow was higher.
Monitor the company's planned full-year capital spending relative to depreciation, as indicated in the filing, given the higher investment level compared to the prior year.