Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue and free cash flow both declined compared with the prior quarter and the same quarter last year, while operating cash flow improved versus the prior quarter. The free cash flow margin strengthened sequentially but weakened slightly year-over-year.
- Operating cash flow was higher than capital expenditure by a wide margin, resulting in robust free cash flow. The free cash flow margin remained high despite a lower revenue base compared with both the prior quarter and the year-ago quarter.
- Compared with the prior quarter, revenue was lower, operating cash flow improved, capital expenditure was slightly lower, and free cash flow improved with a stronger margin. Compared with the same quarter last year, revenue was lower, operating cash flow weakened, capital expenditure was higher, and free cash flow declined with a slightly weaker margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$8.0B
Trailing twelve-month free cash flow.
Quarter free cash flow
$2.9B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$3.0B
Cash generated by operations before capital spending.
CapEx
$55.0M
Capital spending and related asset purchases.
FCF margin
51.2%
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 | $6.5B | -$514.0M | $38.0M | -$552.0M | -8.4% |
| 2022-09-30 | $6.5B | $3.1B | $64.0M | $3.0B | 46.0% |
| 2022-12-31 | $6.1B | $2.6B | $58.0M | $2.6B | 41.9% |
| 2023-03-31 | $5.7B | $3.0B | $55.0M | $2.9B | 51.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 163.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.0% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$21.5B | 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 Strength
Operating cash flow improved sequentially despite lower revenue, supporting a higher free cash flow and stronger margin. This was the primary factor behind the sequential improvement in free cash flow conversion.
The increase in operating cash flow relative to the prior quarter drove the improvement in 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 was higher than capital expenditure by a wide margin, resulting in robust free cash flow. The free cash flow margin remained high despite a lower revenue base compared with both the prior quarter and the year-ago quarter.
Compared with the prior quarter, revenue was lower, operating cash flow improved, capital expenditure was slightly lower, and free cash flow improved with a stronger margin. Compared with the same quarter last year, revenue was lower, operating cash flow weakened, capital expenditure was higher, and free cash flow declined with a slightly weaker margin.
Monitor any future material changes in FDA regulatory compliance costs, as the filing notes they could become material individually or in the aggregate.