Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Operating cash flow improved sharply from the prior quarter, while capital expenditure declined, resulting in a swing to positive free cash flow. Compared with the same quarter last year, free cash flow was slightly lower despite higher revenue.
- Revenue increased from both the prior quarter and the year-ago quarter. Operating cash flow rose substantially from the prior quarter and was higher than the year-ago quarter. Capital expenditure was lower than the prior quarter but higher than the year-ago quarter. Free cash flow turned positive from negative in the prior quarter but was slightly below the year-ago level. Free cash flow margin improved from negative to positive sequentially but was slightly lower than the year-ago margin.
- Compared with the immediately preceding quarter, operating cash flow was higher and capital expenditure was lower, leading to a significant improvement in free cash flow. Compared with the same quarter one year earlier, revenue and operating cash flow were higher, but higher capital expenditure resulted in slightly lower free cash flow.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$797.1M
Trailing twelve-month free cash flow.
Quarter free cash flow
$126.3M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$683.4M
Cash generated by operations before capital spending.
CapEx
$557.1M
Capital spending and related asset purchases.
FCF margin
6.7%
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 | $1.2B | $327.4M | $466.9M | -$139.5M | -12.1% |
| 2022-09-30 | $1.1B | $129.0M | $606.0M | -$477.0M | -45.1% |
| 2022-12-31 | $1.7B | $373.2M | $680.1M | -$306.9M | -18.2% |
| 2023-03-31 | $1.9B | $683.4M | $557.1M | $126.3M | 6.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 37.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 29.4% | 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 prior quarter and also higher than the year-ago quarter, providing the primary support for positive free cash flow.
The higher operating cash flow drove the swing from negative to positive free cash flow sequentially.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased from both the prior quarter and the year-ago quarter. Operating cash flow rose substantially from the prior quarter and was higher than the year-ago quarter. Capital expenditure was lower than the prior quarter but higher than the year-ago quarter. Free cash flow turned positive from negative in the prior quarter but was slightly below the year-ago level. Free cash flow margin improved from negative to positive sequentially but was slightly lower than the year-ago margin.
Compared with the immediately preceding quarter, operating cash flow was higher and capital expenditure was lower, leading to a significant improvement in free cash flow. Compared with the same quarter one year earlier, revenue and operating cash flow were higher, but higher capital expenditure resulted in slightly lower free cash flow.
Monitor the trend in capital expenditure relative to operating cash flow, as it was the primary factor affecting free cash flow comparisons.