Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Cash conversion weakened as revenue declined from the prior quarter and operating cash flow fell more sharply, while capital expenditure increased. The free cash flow margin was lower compared to both the prior quarter and the same quarter a year earlier.
- Revenue was lower than the prior quarter, and operating cash flow declined even more, while capital expenditure rose. This resulted in a lower free cash flow and a weaker free cash flow margin.
- Compared to the immediately preceding quarter, revenue, operating cash flow, free cash flow, and free cash flow margin all were lower. Versus the same quarter one year earlier, revenue was higher but operating cash flow, free cash flow, and margin were lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.9B
Trailing twelve-month free cash flow.
Quarter free cash flow
$578.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$850.0M
Cash generated by operations before capital spending.
CapEx
$272.0M
Capital spending and related asset purchases.
FCF margin
6.8%
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 | $7.8B | $549.0M | $236.0M | $313.0M | 4.0% |
| 2022-12-31 | $8.7B | $1.4B | $285.0M | $1.1B | 12.7% |
| 2023-03-31 | $9.2B | $1.1B | $223.0M | $900.0M | 9.8% |
| 2023-06-30 | $8.5B | $850.0M | $272.0M | $578.0M | 6.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 61.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.2% | 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.
Capital expenditure and operating cash flow gap
In the current quarter, capital expenditure was higher than both prior periods, while operating cash flow was lower. This widening gap contributed to the reduction in free cash flow and margin.
If capital expenditure remains elevated relative to operating cash flow, free cash flow may continue to be constrained.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was lower than the prior quarter, and operating cash flow declined even more, while capital expenditure rose. This resulted in a lower free cash flow and a weaker free cash flow margin.
Compared to the immediately preceding quarter, revenue, operating cash flow, free cash flow, and free cash flow margin all were lower. Versus the same quarter one year earlier, revenue was higher but operating cash flow, free cash flow, and margin were lower.
Monitor the trend in capital expenditure relative to operating cash flow, as capital expenditure increased while operating cash flow declined.