Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow and its margin weakened compared to both the preceding quarter and the same quarter one year earlier, driven by a lower operating cash flow despite a modest reduction in capital expenditure. Revenue was also lower than both comparison periods.
- Revenue declined while operating cash flow fell more sharply, resulting in a lower free cash flow margin. Capital expenditure was reduced, but the drop in operating cash flow was the primary factor in the conversion weakening.
- Compared to the preceding quarter, all metrics were lower: revenue, operating cash flow, capital expenditure, free cash flow, and free cash flow margin. The same pattern held versus the same quarter one year earlier, with each metric showing a decline.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.2B
Trailing twelve-month free cash flow.
Quarter free cash flow
$253.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$278.0M
Cash generated by operations before capital spending.
CapEx
$25.0M
Capital spending and related asset purchases.
FCF margin
7.6%
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 | $3.5B | $353.0M | $27.0M | $326.0M | 9.3% |
| 2022-09-30 | $3.3B | $239.0M | $24.0M | $215.0M | 6.4% |
| 2022-12-31 | $3.4B | $464.0M | $34.0M | $430.0M | 12.5% |
| 2023-03-31 | $3.3B | $278.0M | $25.0M | $253.0M | 7.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 76.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.7% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$5.5B | 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 Decline
Operating cash flow decreased substantially from both the prior quarter and the year-ago period, while revenue also fell but by a smaller proportion. This drove the free cash flow margin lower.
The lower operating cash flow was the strongest observable driver of the reduced free cash flow and margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue declined while operating cash flow fell more sharply, resulting in a lower free cash flow margin. Capital expenditure was reduced, but the drop in operating cash flow was the primary factor in the conversion weakening.
Compared to the preceding quarter, all metrics were lower: revenue, operating cash flow, capital expenditure, free cash flow, and free cash flow margin. The same pattern held versus the same quarter one year earlier, with each metric showing a decline.
Monitor the trajectory of operating cash flow, as its decline was the most significant factor in the weakened free cash flow generation.