Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
In the fiscal second quarter, cash generation strengthened substantially as revenue and operating cash flow rose from both the prior quarter and the same period last year. The free cash flow margin improved meaningfully, reflecting a higher conversion of revenue into cash.
- Revenue grew compared with both the preceding quarter and the year-ago quarter, while operating cash flow expanded at a faster pace, leading to a higher free cash flow margin. Capital expenditure was higher than the prior quarter but lower than a year earlier, supporting improved cash conversion.
- Compared with the immediately preceding quarter, all cash flow metrics improved, with free cash flow and its margin both rising. Versus the same quarter one year earlier, revenue, operating cash flow, and free cash flow were higher, while the margin also strengthened.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$882.9M
Trailing twelve-month free cash flow.
Quarter free cash flow
$155.6M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$187.1M
Cash generated by operations before capital spending.
CapEx
$31.5M
Capital spending and related asset purchases.
FCF margin
6.8%
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 | $2.0B | $344.9M | $18.3M | $326.6M | 16.6% |
| 2022-09-30 | $2.1B | $399.4M | $40.8M | $358.6M | 16.9% |
| 2022-12-31 | $2.0B | $66.3M | $24.2M | $42.1M | 2.1% |
| 2023-03-31 | $2.3B | $187.1M | $31.5M | $155.6M | 6.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 51.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.4% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$3.0B | 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 Expansion
Operating cash flow rose significantly compared with both the prior quarter and the year-ago quarter, far outpacing the increase in capital expenditure. This was the strongest observable factor behind the improvement in free cash flow and margin.
The higher operating cash flow directly lifted free cash flow and drove the margin to a higher level versus both comparison periods.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue grew compared with both the preceding quarter and the year-ago quarter, while operating cash flow expanded at a faster pace, leading to a higher free cash flow margin. Capital expenditure was higher than the prior quarter but lower than a year earlier, supporting improved cash conversion.
Compared with the immediately preceding quarter, all cash flow metrics improved, with free cash flow and its margin both rising. Versus the same quarter one year earlier, revenue, operating cash flow, and free cash flow were higher, while the margin also strengthened.
Capital expenditure increased from the prior quarter; monitor whether this trend continues and its effect on free cash flow.