Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned positive and improved notably from the same period one year earlier, as operating cash flow increased and capital expenditure decreased. However, free cash flow declined compared with the immediate prior quarter, due to a decrease in operating cash flow while capital spending remained stable.
- Operating cash flow exceeded capital expenditure, resulting in positive free cash flow. The free cash flow margin improved markedly versus a year ago, but weakened sequentially as operating cash flow declined relative to revenue.
- Compared to the preceding quarter, free cash flow and margin were lower, as operating cash flow decreased while revenue was slightly higher. Compared to the same quarter one year earlier, free cash flow and margin were higher, driven by stronger operating cash flow and lower capital spending.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.3B
Trailing twelve-month free cash flow.
Quarter free cash flow
$412.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$613.0M
Cash generated by operations before capital spending.
CapEx
$201.0M
Capital spending and related asset purchases.
FCF margin
7.9%
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 | $5.1B | $740.0M | $217.0M | $523.0M | 10.3% |
| 2022-09-30 | $5.1B | $798.0M | $209.0M | $589.0M | 11.7% |
| 2022-12-31 | $5.0B | $991.0M | $197.0M | $794.0M | 16.0% |
| 2023-03-31 | $5.2B | $613.0M | $201.0M | $412.0M | 7.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 72.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.9% | 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 Recovery
Operating cash flow increased substantially from the same quarter one year earlier, while capital expenditure decreased, enabling a notable improvement in free cash flow. However, operating cash flow declined sequentially, narrowing the free cash flow margin.
Continued strength in operating cash flow is key to maintaining or enhancing free cash flow and margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow exceeded capital expenditure, resulting in positive free cash flow. The free cash flow margin improved markedly versus a year ago, but weakened sequentially as operating cash flow declined relative to revenue.
Compared to the preceding quarter, free cash flow and margin were lower, as operating cash flow decreased while revenue was slightly higher. Compared to the same quarter one year earlier, free cash flow and margin were higher, driven by stronger operating cash flow and lower capital spending.
Monitor trends in operating cash flow generation relative to revenue levels.