Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned positive but was significantly lower than both the prior quarter and the same quarter last year, driven by a sharp decline in revenue and a rise in capital expenditure. Operating cash flow also decreased compared to the previous quarter, though it remained slightly above the year-ago level.
- Revenue fell sharply from both comparison periods, while operating cash flow declined sequentially but improved year-over-year. Capital expenditure increased relative to both periods, resulting in a free cash flow margin that weakened substantially from the prior quarter and was lower than a year ago.
- Compared to the immediately preceding quarter, revenue, operating cash flow, free cash flow, and free cash flow margin all decreased. Versus the same quarter one year earlier, revenue was lower, operating cash flow was slightly higher, capital expenditure was higher, and free cash flow and margin were lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$855.2M
Trailing twelve-month free cash flow.
Quarter free cash flow
$78.8M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$676.8M
Cash generated by operations before capital spending.
CapEx
$598.0M
Capital spending and related asset purchases.
FCF margin
2.9%
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 | $5.0B | $459.6M | $395.9M | $63.7M | 1.3% |
| 2022-12-31 | $4.1B | $537.5M | $518.9M | $18.6M | 0.5% |
| 2023-03-31 | $3.8B | $1.2B | $475.7M | $694.1M | 18.3% |
| 2023-06-30 | $2.7B | $676.8M | $598.0M | $78.8M | 2.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 23.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 22.0% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$12.2B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Revenue Decline
Revenue dropped substantially from both the prior quarter and the year-ago quarter, representing the most significant observable change among the supplied metrics. This decline was accompanied by a reduction in operating cash flow sequentially, though operating cash flow held up better than revenue on a year-over-year basis.
The revenue decline was the primary factor behind the weakened free cash flow and margin in the current quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue fell sharply from both comparison periods, while operating cash flow declined sequentially but improved year-over-year. Capital expenditure increased relative to both periods, resulting in a free cash flow margin that weakened substantially from the prior quarter and was lower than a year ago.
Compared to the immediately preceding quarter, revenue, operating cash flow, free cash flow, and free cash flow margin all decreased. Versus the same quarter one year earlier, revenue was lower, operating cash flow was slightly higher, capital expenditure was higher, and free cash flow and margin were lower.
Monitor the trajectory of capital expenditure, which increased sequentially and year-over-year, as it directly impacts free cash flow generation.