Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was slightly higher than the prior quarter but lower than the same quarter last year. Free cash flow margin weakened compared to both the prior quarter and the year-ago quarter.
- Operating cash flow was lower than both the prior quarter and the year-ago quarter, while capital expenditure was lower than the prior quarter but higher than the year-ago quarter. The resulting free cash flow was lower than the prior quarter but higher than the year-ago quarter, with a margin that weakened sequentially and year-over-year.
- Compared to the prior quarter, revenue was slightly higher but operating cash flow and free cash flow were lower, leading to a weaker free cash flow margin. Compared to the same quarter last year, revenue was lower, operating cash flow was lower, and free cash flow was higher due to a larger reduction in capital expenditure relative to the operating cash flow decline.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$3.4B
Trailing twelve-month free cash flow.
Quarter free cash flow
$507.5M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$733.8M
Cash generated by operations before capital spending.
CapEx
$226.3M
Capital spending and related asset purchases.
FCF margin
10.4%
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 |
|---|---|---|---|---|---|
| 2022-06-30 | $6.2B | $1.0B | $164.1M | $837.7M | 13.5% |
| 2022-09-30 | $5.7B | $1.5B | $241.2M | $1.3B | 22.2% |
| 2022-12-31 | $4.8B | $1.1B | $344.2M | $799.2M | 16.6% |
| 2023-03-31 | $4.9B | $733.8M | $226.3M | $507.5M | 10.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 78.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 4.6% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$1.5B | 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 was lower than both the prior quarter and the year-ago quarter, while revenue was only slightly higher than the prior quarter and lower than the year-ago quarter. This indicates a weaker conversion of revenue into cash from operations.
The lower operating cash flow was the primary factor behind the weakened free cash flow margin compared to both periods.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow was lower than both the prior quarter and the year-ago quarter, while capital expenditure was lower than the prior quarter but higher than the year-ago quarter. The resulting free cash flow was lower than the prior quarter but higher than the year-ago quarter, with a margin that weakened sequentially and year-over-year.
Compared to the prior quarter, revenue was slightly higher but operating cash flow and free cash flow were lower, leading to a weaker free cash flow margin. Compared to the same quarter last year, revenue was lower, operating cash flow was lower, and free cash flow was higher due to a larger reduction in capital expenditure relative to the operating cash flow decline.
Monitor the trend in operating cash flow, which declined both sequentially and year-over-year despite stable revenue.