Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow rose sharply despite a significant drop in revenue, driven by a steep reduction in capital expenditure. The free cash flow margin improved markedly compared to both the prior quarter and the same quarter last year.
- Revenue was lower than both the preceding quarter and the year-ago period, yet operating cash flow remained relatively stable, declining only modestly from the prior quarter and increasing from a year earlier. Capital expenditure was substantially lower, resulting in free cash flow that was higher than both comparison periods and a free cash flow margin that improved to a much higher level.
- Compared with the prior quarter, revenue was lower, operating cash flow was slightly lower, capital expenditure was much lower, and free cash flow and margin were higher. Versus the same quarter a year ago, revenue was lower, operating cash flow was higher, capital expenditure was much lower, and free cash flow and margin were higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$739.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
$419.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$422.0M
Cash generated by operations before capital spending.
CapEx
$3.0M
Capital spending and related asset purchases.
FCF margin
74.0%
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 | $2.5B | -$31.0M | $104.0M | -$135.0M | -5.4% |
| 2022-12-31 | $2.5B | $192.0M | $113.0M | $79.0M | 3.1% |
| 2023-03-31 | $2.4B | $509.0M | $133.0M | $376.0M | 15.4% |
| 2023-06-30 | $566.0M | $422.0M | $3.0M | $419.0M | 74.0% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -5237.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.5% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$1.2B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Capital Expenditure Reduction
Capital expenditure was significantly lower than both the prior quarter and the year-ago quarter, dropping to a minimal level. This reduction was the strongest observable driver of the increase in free cash flow and the improvement in free cash flow margin.
The lower capital expenditure directly boosted free cash flow and margin, even as revenue declined.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was lower than both the preceding quarter and the year-ago period, yet operating cash flow remained relatively stable, declining only modestly from the prior quarter and increasing from a year earlier. Capital expenditure was substantially lower, resulting in free cash flow that was higher than both comparison periods and a free cash flow margin that improved to a much higher level.
Compared with the prior quarter, revenue was lower, operating cash flow was slightly lower, capital expenditure was much lower, and free cash flow and margin were higher. Versus the same quarter a year ago, revenue was lower, operating cash flow was higher, capital expenditure was much lower, and free cash flow and margin were higher.
Monitor whether capital expenditure remains at this low level in future quarters, as it was the primary factor behind the elevated free cash flow.