Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue decreased this quarter compared to both the prior quarter and the same quarter last year. The free cash flow margin improved sequentially and also improved year over year, supported by a higher operating cash flow relative to revenue, despite lower revenue.
- Operating cash flow increased versus the preceding quarter and also rose relative to the year-ago quarter, while capital expenditure grew moderately. This combination drove free cash flow higher compared to both prior periods, and the free cash flow margin strengthened sequentially and year over year.
- Compared to the immediately preceding quarter, revenue was slightly lower but operating cash flow improved, leading to a higher free cash flow margin. Versus the same quarter one year earlier, revenue was also lower, yet operating cash flow and free cash flow were both higher, signaling a more efficient cash conversion profile.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$5.5B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.2B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$2.0B
Cash generated by operations before capital spending.
CapEx
$835.0M
Capital spending and related asset purchases.
FCF margin
19.8%
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 |
|---|---|---|---|---|---|
| 2022-09-30 | $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% |
| 2023-06-30 | $6.0B | $2.0B | $835.0M | $1.2B | 19.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 75.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 14.0% | 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 Strength
Operating cash flow rose compared to both the prior quarter and the year-ago quarter, even as revenue declined. This was the strongest observable numeric driver of the increase in free cash flow and margin.
Higher operating cash flow directly lifted free cash flow and margin, compensating for lower revenue.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow increased versus the preceding quarter and also rose relative to the year-ago quarter, while capital expenditure grew moderately. This combination drove free cash flow higher compared to both prior periods, and the free cash flow margin strengthened sequentially and year over year.
Compared to the immediately preceding quarter, revenue was slightly lower but operating cash flow improved, leading to a higher free cash flow margin. Versus the same quarter one year earlier, revenue was also lower, yet operating cash flow and free cash flow were both higher, signaling a more efficient cash conversion profile.
Monitor whether operating cash flow can sustain its improved level if revenue remains at this lower trajectory.