Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned positive this quarter, with a strong margin relative to revenue. Compared to the prior quarter, performance improved markedly; versus the same quarter last year, free cash flow was lower and the margin narrowed.
- Revenue rose, and operating cash flow shifted from negative to a substantial positive figure. Capital expenditure increased, yet free cash flow margin remained healthy, indicating efficient conversion of revenue into cash.
- Sequentially, the company moved from a negative free cash flow position to a positive one, a significant improvement. Year-over-year, free cash flow declined and the margin weakened, despite higher revenue.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$7.4B
Trailing twelve-month free cash flow.
Quarter free cash flow
$3.1B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$3.4B
Cash generated by operations before capital spending.
CapEx
$360.0M
Capital spending and related asset purchases.
FCF margin
34.4%
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 | $8.0B | $3.1B | $252.0M | $2.8B | 35.1% |
| 2022-12-31 | $8.2B | $3.1B | $347.0M | $2.7B | 33.7% |
| 2023-03-31 | $8.0B | -$955.0M | $279.0M | -$1.2B | -15.4% |
| 2023-06-30 | $9.0B | $3.4B | $360.0M | $3.1B | 34.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 196.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 4.0% | 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 Recovery
Operating cash flow reversed from a negative balance in the prior quarter to a large positive figure, providing the primary impetus for free cash flow generation.
The turnaround in operating cash flow was the strongest observable driver of the quarter's free cash flow.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue rose, and operating cash flow shifted from negative to a substantial positive figure. Capital expenditure increased, yet free cash flow margin remained healthy, indicating efficient conversion of revenue into cash.
Sequentially, the company moved from a negative free cash flow position to a positive one, a significant improvement. Year-over-year, free cash flow declined and the margin weakened, despite higher revenue.
Monitor the level of capital expenditure relative to operating cash flow, as it increased from both the prior and year-ago periods.