Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow and free cash flow margin improved compared to both the prior quarter and the same quarter last year, driven by a higher revenue base and stable operating cash flow conversion. The year-over-year increase in operating cash flow was the strongest contributor, while capital expenditure remained relatively steady.
- Revenue was stable sequentially but higher year-over-year; operating cash flow decreased slightly from the prior quarter yet increased versus a year ago. The resulting free cash flow margin narrowed marginally from the immediate prior quarter but expanded versus the same quarter one year earlier, indicating improved conversion from revenue to free cash flow over a longer horizon.
- Compared with the prior quarter, free cash flow and free cash flow margin were lower, driven by a slight decline in operating cash flow and a similar level of capital expenditure. Versus the same quarter one year earlier, free cash flow and margin were higher, primarily reflecting a stronger operating cash flow on higher revenue.
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
$242.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$402.0M
Cash generated by operations before capital spending.
CapEx
$160.0M
Capital spending and related asset purchases.
FCF margin
6.5%
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 | $3.6B | $863.0M | $165.0M | $698.0M | 19.6% |
| 2022-12-31 | $3.7B | $560.0M | $171.0M | $389.0M | 10.4% |
| 2023-03-31 | $3.7B | $417.0M | $164.0M | $253.0M | 6.9% |
| 2023-06-30 | $3.7B | $402.0M | $160.0M | $242.0M | 6.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 81.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 4.3% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$12.4B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Year-over-year operating cash flow growth
Operating cash flow increased notably compared to the same quarter a year ago, while capital expenditure remained nearly unchanged. This was the primary factor behind the improvement in free cash flow and margin on a year-over-year basis.
Year-over-year free cash flow and margin improved, supported by higher operating cash flow on a steady capital expenditure base.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was stable sequentially but higher year-over-year; operating cash flow decreased slightly from the prior quarter yet increased versus a year ago. The resulting free cash flow margin narrowed marginally from the immediate prior quarter but expanded versus the same quarter one year earlier, indicating improved conversion from revenue to free cash flow over a longer horizon.
Compared with the prior quarter, free cash flow and free cash flow margin were lower, driven by a slight decline in operating cash flow and a similar level of capital expenditure. Versus the same quarter one year earlier, free cash flow and margin were higher, primarily reflecting a stronger operating cash flow on higher revenue.
Monitor the trend in operating cash flow relative to revenue, as any sustained divergence could signal shifts in cash conversion efficiency.