Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Operating cash flow improved substantially, driving free cash flow to a significantly higher level than both the prior quarter and the year-ago quarter. The free cash flow margin widened considerably, reflecting a stronger conversion of revenue into cash after capital spending.
- Revenue was stable compared with the preceding quarter and the year-ago quarter, while operating cash flow was markedly higher. Capital expenditure was lower than both comparison periods, which together with stronger operating cash flow produced a much larger free cash flow and a higher free cash flow margin.
- Compared with the immediately preceding quarter, both operating cash flow and free cash flow were higher, and the free cash flow margin improved. Versus the same quarter one year earlier, operating cash flow and free cash flow were also higher, and the free cash flow margin was wider.
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
$2.1B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$2.2B
Cash generated by operations before capital spending.
CapEx
$62.0M
Capital spending and related asset purchases.
FCF margin
25.9%
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 | $8.0B | $102.8M | $90.0M | $12.7M | 0.2% |
| 2022-09-30 | $7.9B | $556.8M | $85.0M | $471.9M | 6.0% |
| 2022-12-31 | $7.9B | $443.9M | $111.6M | $332.3M | 4.2% |
| 2023-03-31 | $8.2B | $2.2B | $62.0M | $2.1B | 25.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 162.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.8% | 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.
Operating Cash Flow Strength
Operating cash flow was substantially higher than both the prior quarter and the year-ago quarter, and it was the primary contributor to the increase in free cash flow. This occurred while revenue was relatively stable across the periods.
The improved cash generation from operations, combined with lower capital spending, led to a materially higher free cash flow and a significantly wider free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was stable compared with the preceding quarter and the year-ago quarter, while operating cash flow was markedly higher. Capital expenditure was lower than both comparison periods, which together with stronger operating cash flow produced a much larger free cash flow and a higher free cash flow margin.
Compared with the immediately preceding quarter, both operating cash flow and free cash flow were higher, and the free cash flow margin improved. Versus the same quarter one year earlier, operating cash flow and free cash flow were also higher, and the free cash flow margin was wider.
Monitor the level of capital expenditure relative to the current quarter, as it was lower than both comparison periods and a change in trend could affect free cash flow conversion.