Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow improved significantly compared to the same quarter last year, driven by higher revenue and operating cash flow. However, free cash flow margin weakened from the prior quarter due to a lower operating cash flow conversion.
- Revenue increased from both the prior quarter and the year-ago quarter. Operating cash flow was higher than a year ago but lower than the prior quarter, while capital expenditure rose slightly. As a result, free cash flow and free cash flow margin improved year over year but declined sequentially.
- Compared to the prior quarter, free cash flow and free cash flow margin weakened, as operating cash flow decreased while capital expenditure remained stable. Versus the same quarter last year, free cash flow and free cash flow margin improved substantially, driven by higher revenue and operating cash flow.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$6.6B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.1B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.7B
Cash generated by operations before capital spending.
CapEx
$526.0M
Capital spending and related asset purchases.
FCF margin
17.7%
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 | $5.9B | $2.4B | $531.2M | $1.9B | 32.4% |
| 2022-12-31 | $5.9B | $2.2B | $528.7M | $1.7B | 28.2% |
| 2023-03-31 | $5.9B | $2.4B | $503.0M | $1.9B | 32.5% |
| 2023-06-30 | $6.5B | $1.7B | $526.0M | $1.1B | 17.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 49.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 8.1% | 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.
Revenue Growth
Revenue increased compared to both the prior quarter and the year-ago quarter, providing a solid base for cash generation. This was the strongest observable driver of the improved free cash flow year over year.
Higher revenue supported a year-over-year increase in free cash flow despite a sequential decline in operating cash flow.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased from both the prior quarter and the year-ago quarter. Operating cash flow was higher than a year ago but lower than the prior quarter, while capital expenditure rose slightly. As a result, free cash flow and free cash flow margin improved year over year but declined sequentially.
Compared to the prior quarter, free cash flow and free cash flow margin weakened, as operating cash flow decreased while capital expenditure remained stable. Versus the same quarter last year, free cash flow and free cash flow margin improved substantially, driven by higher revenue and operating cash flow.
Monitor the trend in operating cash flow relative to revenue, as its sequential decline was the primary factor behind the weakened free cash flow margin.