Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow margin weakened sharply from the prior quarter as operating cash flow declined while revenue held steady. Compared to the same quarter last year, free cash flow was slightly lower despite higher revenue.
- Revenue was unchanged from the prior quarter, but operating cash flow fell significantly, reducing free cash flow and margin. Capital expenditure was lower than both the prior quarter and the year-ago quarter, yet the drop in operating cash flow was the primary factor in the conversion decline.
- Compared to the prior quarter, free cash flow margin more than halved, driven by a substantial decrease in operating cash flow. Versus the same quarter last year, revenue was higher but free cash flow was slightly lower, resulting in a weaker margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$3.1B
Trailing twelve-month free cash flow.
Quarter free cash flow
$596.8M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$709.5M
Cash generated by operations before capital spending.
CapEx
$112.7M
Capital spending and related asset purchases.
FCF margin
26.7%
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 |
|---|---|---|---|---|---|
| 2022-06-30 | $2.0B | $840.4M | $121.9M | $718.5M | 36.6% |
| 2022-09-30 | $2.1B | $793.2M | $110.3M | $682.9M | 32.9% |
| 2022-12-31 | $2.2B | $1.3B | $141.3M | $1.1B | 52.4% |
| 2023-03-31 | $2.2B | $709.5M | $112.7M | $596.8M | 26.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 98.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 5.0% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$6.2B | 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 dropped substantially from the prior quarter while revenue was flat, indicating a significant change in cash conversion efficiency. This was the strongest observable driver of the quarter's weaker free cash flow.
The decline in operating cash flow directly reduced free cash flow and margin, despite lower capital expenditure.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was unchanged from the prior quarter, but operating cash flow fell significantly, reducing free cash flow and margin. Capital expenditure was lower than both the prior quarter and the year-ago quarter, yet the drop in operating cash flow was the primary factor in the conversion decline.
Compared to the prior quarter, free cash flow margin more than halved, driven by a substantial decrease in operating cash flow. Versus the same quarter last year, revenue was higher but free cash flow was slightly lower, resulting in a weaker margin.
Monitor whether operating cash flow recovers toward prior levels given its sharp decline from the preceding quarter.