Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Operating cash flow improved from the prior quarter, leading to positive free cash flow and a positive margin. However, free cash flow and margin both weakened compared to the same quarter last year.
- Revenue increased from the prior quarter, while operating cash flow rose by a larger proportion, resulting in free cash flow turning positive from negative. Capital expenditure was slightly lower than the prior quarter, contributing to the cash conversion improvement.
- Compared to the previous quarter, revenue, operating cash flow, and free cash flow all improved. Compared to the same quarter one year earlier, revenue increased but operating cash flow decreased, leading to lower free cash flow and margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$1.5B
Trailing twelve-month free cash flow.
Quarter free cash flow
$491.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.4B
Cash generated by operations before capital spending.
CapEx
$925.0M
Capital spending and related asset purchases.
FCF margin
7.0%
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 | $6.2B | $234.0M | $1.1B | -$838.0M | -13.5% |
| 2022-12-31 | $6.2B | $579.0M | $1.4B | -$777.0M | -12.6% |
| 2023-03-31 | $5.7B | $706.0M | $1.0B | -$340.0M | -6.0% |
| 2023-06-30 | $7.0B | $1.4B | $925.0M | $491.0M | 7.0% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 71.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 13.1% | 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 decline
Operating cash flow was lower compared to the same quarter last year, even though revenue increased. The filing notes that operating cash flows for the six-month period were impacted by net income adjustments and increases in air traffic liability and excise tax liabilities.
The year-over-year drop in operating cash flow directly reduced free cash flow and margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased from the prior quarter, while operating cash flow rose by a larger proportion, resulting in free cash flow turning positive from negative. Capital expenditure was slightly lower than the prior quarter, contributing to the cash conversion improvement.
Compared to the previous quarter, revenue, operating cash flow, and free cash flow all improved. Compared to the same quarter one year earlier, revenue increased but operating cash flow decreased, leading to lower free cash flow and margin.
Monitor operating cash flow trends, as it declined year over year despite higher revenue.