Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue and operating cash flow declined from the prior quarter, but free cash flow improved compared to the same quarter last year. The free cash flow margin weakened sequentially yet strengthened year over year.
- Revenue decreased while operating cash flow fell more sharply, resulting in a lower free cash flow margin versus the prior quarter. Capital expenditure remained relatively stable across periods, so the conversion change was driven primarily by the drop in operating cash flow.
- Compared to the immediately preceding quarter, revenue, operating cash flow, free cash flow, and free cash flow margin all decreased. Compared to the same quarter one year earlier, revenue was lower but operating cash flow was higher, free cash flow was higher, and the free cash flow margin improved.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.6B
Trailing twelve-month free cash flow.
Quarter free cash flow
$375.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$414.0M
Cash generated by operations before capital spending.
CapEx
$39.0M
Capital spending and related asset purchases.
FCF margin
26.2%
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 | $1.6B | $232.0M | $41.0M | $191.0M | 12.3% |
| 2022-12-31 | $1.6B | $494.0M | $34.0M | $460.0M | 29.1% |
| 2023-03-31 | $1.5B | $565.0M | $40.0M | $525.0M | 34.2% |
| 2023-06-30 | $1.4B | $414.0M | $39.0M | $375.0M | 26.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 140.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.7% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$4.4B | 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 decrease
Operating cash flow fell sequentially from the prior quarter while revenue also declined, leading to a weaker free cash flow margin. Capital expenditure was nearly unchanged, underscoring that the operating cash flow change was the primary factor.
The drop in operating cash flow reduced free cash flow and margin relative to the prior quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue decreased while operating cash flow fell more sharply, resulting in a lower free cash flow margin versus the prior quarter. Capital expenditure remained relatively stable across periods, so the conversion change was driven primarily by the drop in operating cash flow.
Compared to the immediately preceding quarter, revenue, operating cash flow, free cash flow, and free cash flow margin all decreased. Compared to the same quarter one year earlier, revenue was lower but operating cash flow was higher, free cash flow was higher, and the free cash flow margin improved.
Monitor the trajectory of operating cash flow given its sequential decline despite year-over-year improvement.