Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow improved significantly from the prior quarter and year-ago quarter, driven by higher operating cash flow relative to capital expenditure. The cash conversion margin strengthened compared to the same quarter last year.
- Revenue remained stable compared to the prior quarter, while operating cash flow decreased, leading to a lower free cash flow margin. However, relative to the year-ago quarter, operating cash flow and free cash flow were substantially higher, resulting in a much improved cash conversion rate.
- Compared to the prior quarter, free cash flow and margin were lower, primarily due to a decrease in operating cash flow. Versus the year-ago quarter, free cash flow and margin were markedly higher, reflecting a substantial increase in operating cash flow.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$4.3B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.3B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.4B
Cash generated by operations before capital spending.
CapEx
$101.0M
Capital spending and related asset purchases.
FCF margin
16.4%
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 | $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% |
| 2023-06-30 | $8.2B | $1.4B | $101.0M | $1.3B | 16.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 90.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.2% | 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 Improvement
Operating cash flow was substantially higher than the year-ago quarter, which was the primary factor behind the year-over-year increase in free cash flow. Capital expenditure remained relatively stable across periods.
The year-over-year improvement in operating cash flow drove a significant expansion in free cash flow and margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue remained stable compared to the prior quarter, while operating cash flow decreased, leading to a lower free cash flow margin. However, relative to the year-ago quarter, operating cash flow and free cash flow were substantially higher, resulting in a much improved cash conversion rate.
Compared to the prior quarter, free cash flow and margin were lower, primarily due to a decrease in operating cash flow. Versus the year-ago quarter, free cash flow and margin were markedly higher, reflecting a substantial increase in operating cash flow.
Monitor the trend in operating cash flow, as its sequential decline drove the quarter-over-quarter reduction in free cash flow.