Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow and margin weakened versus both the prior quarter and the same quarter last year, driven by lower operating cash flow. Revenue was slightly higher than a year ago but slightly lower than the preceding quarter.
- Operating cash flow as a share of revenue declined compared to both the prior quarter and the year-ago quarter, while capital expenditure was lower in absolute terms. The resulting free cash flow margin contracted, reflecting a weaker conversion of revenue into free cash flow.
- Compared to the immediately preceding quarter, revenue was slightly lower, operating cash flow was lower, capital expenditure was lower, and free cash flow and margin were both lower. Versus the same quarter one year earlier, revenue was slightly higher, but operating cash flow, free cash flow, and margin were all lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$5.4B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.1B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.8B
Cash generated by operations before capital spending.
CapEx
$772.0M
Capital spending and related asset purchases.
FCF margin
17.6%
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 | $6.3B | $1.9B | $797.0M | $1.1B | 18.1% |
| 2022-09-30 | $6.6B | $2.9B | $1.0B | $1.9B | 28.3% |
| 2022-12-31 | $6.2B | $2.3B | $930.0M | $1.4B | 22.0% |
| 2023-03-31 | $6.1B | $1.8B | $772.0M | $1.1B | 17.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 65.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 12.7% | 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.
Operating Cash Flow Decline
Operating cash flow was lower than both the prior quarter and the same quarter last year, which was the primary factor behind the weakened free cash flow. The filing notes that cash provided by operating activities decreased in the first three months of 2023 compared to the same period of 2022 due to payments related to the settlement of labor union agreements.
Lower operating cash flow directly reduced free cash flow and compressed the free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a share of revenue declined compared to both the prior quarter and the year-ago quarter, while capital expenditure was lower in absolute terms. The resulting free cash flow margin contracted, reflecting a weaker conversion of revenue into free cash flow.
Compared to the immediately preceding quarter, revenue was slightly lower, operating cash flow was lower, capital expenditure was lower, and free cash flow and margin were both lower. Versus the same quarter one year earlier, revenue was slightly higher, but operating cash flow, free cash flow, and margin were all lower.
Monitor the trajectory of operating cash flow, as it declined from both the prior quarter and the year-ago period.