Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Operating cash flow rose versus both the prior quarter and the same quarter a year ago, while capital expenditure increased sharply from the prior quarter. Free cash flow margin improved substantially compared to the same quarter last year, though it was lower than the preceding quarter.
- With higher revenue, operating cash flow increased, but a larger capital expenditure reduced free cash flow relative to the prior quarter. The free cash flow margin weakened sequentially even as it strengthened sharply versus the year-ago quarter.
- Revenue, operating cash flow, and free cash flow all improved compared to the same quarter last year, with free cash flow turning positive. Versus the prior quarter, revenue and operating cash flow rose, but higher capital expenditure led to a decline in free cash flow and margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.8B
Trailing twelve-month free cash flow.
Quarter free cash flow
$596.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.4B
Cash generated by operations before capital spending.
CapEx
$796.0M
Capital spending and related asset purchases.
FCF margin
16.9%
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 | $3.0B | -$44.5M | $225.5M | -$270.1M | -9.0% |
| 2022-12-31 | $2.6B | $575.7M | $166.7M | $409.0M | 15.7% |
| 2023-03-31 | $2.9B | $1.3B | $252.0M | $1.1B | 36.7% |
| 2023-06-30 | $3.5B | $1.4B | $796.0M | $596.0M | 16.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 129.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 22.6% | 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.
Stronger Operating Cash Generation
The largest observable driver of the cash conversion improvement compared to the year-ago quarter was the increase in operating cash flow alongside higher revenue.
Free cash flow turned positive compared to the same quarter last year, supported by higher operating cash flow.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
With higher revenue, operating cash flow increased, but a larger capital expenditure reduced free cash flow relative to the prior quarter. The free cash flow margin weakened sequentially even as it strengthened sharply versus the year-ago quarter.
Revenue, operating cash flow, and free cash flow all improved compared to the same quarter last year, with free cash flow turning positive. Versus the prior quarter, revenue and operating cash flow rose, but higher capital expenditure led to a decline in free cash flow and margin.
Monitor the trend in capital expenditure given its significant increase from the prior quarter.