Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was stable compared to the prior quarter and higher than the same quarter last year. Free cash flow and margin decreased sequentially but improved year-over-year, as operating cash flow declined and capital expenditure increased relative to the prior quarter.
- The company converted revenue into operating cash flow at a lower rate than the prior quarter, as operating cash flow declined while revenue remained flat. Higher capital expenditure further reduced free cash flow, resulting in a free cash flow margin that was lower than the prior quarter but higher than the same quarter last year.
- Compared to the immediately preceding quarter, free cash flow and margin weakened due to lower operating cash flow and higher capital expenditure. Compared to the same quarter one year earlier, free cash flow and margin improved, driven by higher revenue and operating cash flow despite increased capital spending.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.0B
Trailing twelve-month free cash flow.
Quarter free cash flow
$177.3M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$371.4M
Cash generated by operations before capital spending.
CapEx
$194.1M
Capital spending and related asset purchases.
FCF margin
10.5%
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 |
|---|---|---|---|---|---|
| 2022-06-30 | $1.5B | $446.7M | $130.5M | $316.2M | 20.8% |
| 2022-09-30 | $1.6B | $383.2M | $169.1M | $214.1M | 13.7% |
| 2022-12-31 | $1.7B | $437.9M | $139.2M | $298.7M | 18.0% |
| 2023-03-31 | $1.7B | $371.4M | $194.1M | $177.3M | 10.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 49.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 11.4% | 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.
Sequential Decline in Operating Cash Flow
Operating cash flow was lower than the prior quarter while revenue remained unchanged, indicating a weaker cash conversion rate. This decline, combined with higher capital expenditure, drove the sequential reduction in free cash flow and margin.
The sequential weakening in free cash flow margin was primarily attributable to the lower operating cash flow relative to revenue.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
The company converted revenue into operating cash flow at a lower rate than the prior quarter, as operating cash flow declined while revenue remained flat. Higher capital expenditure further reduced free cash flow, resulting in a free cash flow margin that was lower than the prior quarter but higher than the same quarter last year.
Compared to the immediately preceding quarter, free cash flow and margin weakened due to lower operating cash flow and higher capital expenditure. Compared to the same quarter one year earlier, free cash flow and margin improved, driven by higher revenue and operating cash flow despite increased capital spending.
Monitor the trajectory of capital expenditure, which increased from both the prior quarter and the same quarter last year, as it directly impacts free cash flow conversion.