Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned positive in the fiscal third quarter, driven by a substantial improvement in operating cash flow compared to the prior quarter. Revenue was stable sequentially but lower than the same quarter last year, while free cash flow margin recovered from negative territory a quarter ago to a level consistent with the year-ago period.
- With revenue unchanged sequentially, the sharp increase in operating cash flow was the primary factor behind the positive free cash flow, even as capital expenditure declined from the prior quarter. The resulting free cash flow margin improved markedly from the prior quarter but remained modest relative to revenue.
- Compared to the immediately preceding quarter, operating cash flow improved significantly, capital expenditure was lower, and free cash flow swung from negative to positive. Versus the same quarter one year earlier, revenue was lower, operating cash flow was slightly lower, capital expenditure was slightly lower, and free cash flow was essentially stable.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$98.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
$193.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$660.0M
Cash generated by operations before capital spending.
CapEx
$467.0M
Capital spending and related asset purchases.
FCF margin
1.5%
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 |
|---|---|---|---|---|---|
| 2022-10-01 | $13.7B | $797.0M | $564.0M | $233.0M | 1.7% |
| 2022-12-31 | $13.3B | $762.0M | $589.0M | $173.0M | 1.3% |
| 2023-04-01 | $13.1B | $7.0M | $508.0M | -$501.0M | -3.8% |
| 2023-07-01 | $13.1B | $660.0M | $467.0M | $193.0M | 1.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -46.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.6% | 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.
Significant operating cash flow recovery
Operating cash flow rose substantially from the prior quarter, transforming free cash flow from negative to positive. This shift occurred without a change in revenue, highlighting a notable improvement in cash conversion efficiency.
The improvement in operating cash flow was the strongest observable driver behind the positive free cash flow for the quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
With revenue unchanged sequentially, the sharp increase in operating cash flow was the primary factor behind the positive free cash flow, even as capital expenditure declined from the prior quarter. The resulting free cash flow margin improved markedly from the prior quarter but remained modest relative to revenue.
Compared to the immediately preceding quarter, operating cash flow improved significantly, capital expenditure was lower, and free cash flow swung from negative to positive. Versus the same quarter one year earlier, revenue was lower, operating cash flow was slightly lower, capital expenditure was slightly lower, and free cash flow was essentially stable.
Monitor the trajectory of operating cash flow, given its sharp sequential recovery and sensitivity to underlying cash conversion dynamics.