Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow improved sharply from the prior quarter and rose from a year ago, driven by higher operating cash flow and lower capital spending. The free cash flow margin strengthened significantly versus both comparison periods.
- Revenue was slightly lower than the prior quarter but higher than a year ago. Operating cash flow increased substantially from both the prior quarter and the year-ago quarter, while capital expenditure decreased compared to the prior quarter and was slightly above the year-ago level. The combination of higher operating cash flow and lower capital expenditure resulted in a free cash flow margin that was higher than both comparison periods.
- Compared to the immediately preceding quarter, free cash flow was higher and the margin improved, driven by higher operating cash flow and lower capital expenditure. Versus the same quarter one year earlier, free cash flow was higher and the margin improved, with operating cash flow higher and capital expenditure slightly higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.4B
Trailing twelve-month free cash flow.
Quarter free cash flow
$745.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.2B
Cash generated by operations before capital spending.
CapEx
$428.0M
Capital spending and related asset purchases.
FCF margin
23.8%
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 |
|---|---|---|---|---|---|
| 2022-06-30 | $3.3B | $1.0B | $448.0M | $569.0M | 17.5% |
| 2022-09-30 | $3.3B | $1.4B | $445.0M | $968.0M | 29.0% |
| 2022-12-31 | $3.2B | $798.0M | $666.0M | $132.0M | 4.1% |
| 2023-03-31 | $3.1B | $1.2B | $428.0M | $745.0M | 23.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 159.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 13.7% | 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 higher than both the prior quarter and the year-ago quarter, providing the primary support for the increase in free cash flow.
Higher operating cash flow was the strongest observable driver of the improved free cash flow and margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was slightly lower than the prior quarter but higher than a year ago. Operating cash flow increased substantially from both the prior quarter and the year-ago quarter, while capital expenditure decreased compared to the prior quarter and was slightly above the year-ago level. The combination of higher operating cash flow and lower capital expenditure resulted in a free cash flow margin that was higher than both comparison periods.
Compared to the immediately preceding quarter, free cash flow was higher and the margin improved, driven by higher operating cash flow and lower capital expenditure. Versus the same quarter one year earlier, free cash flow was higher and the margin improved, with operating cash flow higher and capital expenditure slightly higher.
Monitor the trend in capital expenditure, as it was lower than the prior quarter but slightly above the year-ago level.