Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned positive this quarter, driven by higher operating cash flow despite a rise in capital spending. Revenue was stable compared to the prior quarter, while the year-ago period posted significantly higher free cash flow and margin.
- Operating cash flow improved relative to the previous quarter, converting a larger share of revenue into cash. Capital expenditure also increased, resulting in a narrower free cash flow margin.
- Compared to the immediately preceding quarter, free cash flow improved from negative to positive as operating cash flow rose and revenue held steady. Versus the same quarter one year earlier, free cash flow and margin were lower, with revenue also lower and capital expenditure higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$310.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
$47.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$663.0M
Cash generated by operations before capital spending.
CapEx
$616.0M
Capital spending and related asset purchases.
FCF margin
1.8%
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 | $2.6B | $473.0M | $529.0M | -$56.0M | -2.1% |
| 2022-12-31 | $3.2B | $1.0B | $646.0M | $364.0M | 11.4% |
| 2023-03-31 | $2.7B | $481.0M | $526.0M | -$45.0M | -1.7% |
| 2023-06-30 | $2.7B | $663.0M | $616.0M | $47.0M | 1.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 30.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 23.0% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$2.7B | 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 Improvement
Operating cash flow increased from the prior quarter, enabling the company to generate positive free cash flow despite higher capital spending. This was the primary factor behind the sequential turnaround in free cash flow.
The improvement in operating cash flow shifted free cash flow from negative to positive, providing additional liquidity relative to the previous quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow improved relative to the previous quarter, converting a larger share of revenue into cash. Capital expenditure also increased, resulting in a narrower free cash flow margin.
Compared to the immediately preceding quarter, free cash flow improved from negative to positive as operating cash flow rose and revenue held steady. Versus the same quarter one year earlier, free cash flow and margin were lower, with revenue also lower and capital expenditure higher.
Monitor the level of capital expenditure relative to operating cash flow, as it remained elevated and absorbed a large portion of cash generated.