Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue held steady relative to the year-ago period, while operating cash flow improved from negative to positive. Free cash flow weakened markedly from the preceding quarter, as operating cash flow contracted despite a slight rise in revenue.
- Cash conversion was weak in the current quarter, with a low free cash flow margin. Operating cash flow covered capital expenditure, but the resulting free cash flow was minimal relative to revenue.
- Compared to the prior quarter, free cash flow fell significantly as operating cash flow decreased while capital expenditure remained roughly similar. Versus the same quarter a year ago, free cash flow turned positive and the margin improved from negative to positive.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$8.6B
Trailing twelve-month free cash flow.
Quarter free cash flow
$76.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$124.0M
Cash generated by operations before capital spending.
CapEx
$48.0M
Capital spending and related asset purchases.
FCF margin
1.2%
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 |
|---|---|---|---|---|---|
| 2022-09-30 | $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% |
| 2023-06-30 | $6.5B | $124.0M | $48.0M | $76.0M | 1.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 3.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.7% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$24.3B | 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 contracted considerably from the prior quarter, outweighing the slight revenue increase and leading to a much lower free cash flow. Capital expenditure remained relatively stable, so the entire free cash flow drop came from operating cash flow.
If operating cash flow remains at the current reduced level, free cash flow margins will stay under pressure going forward.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Cash conversion was weak in the current quarter, with a low free cash flow margin. Operating cash flow covered capital expenditure, but the resulting free cash flow was minimal relative to revenue.
Compared to the prior quarter, free cash flow fell significantly as operating cash flow decreased while capital expenditure remained roughly similar. Versus the same quarter a year ago, free cash flow turned positive and the margin improved from negative to positive.
Monitor the trajectory of operating cash flow, which drove the substantial quarter-over-quarter change in free cash flow.