Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue decreased from the prior quarter but increased from the same quarter last year. Free cash flow margin weakened sequentially but improved slightly year over year.
- Operating cash flow was lower than the previous quarter and capital expenditure was higher, resulting in a lower free cash flow. Compared to the year-ago quarter, operating cash flow improved but capital expenditure also increased, leading to a modestly higher free cash flow.
- Sequentially, free cash flow margin declined sharply as operating cash flow fell and capital expenditure rose. Year over year, the margin improved slightly as operating cash flow growth outpaced the increase in capital expenditure.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$548.1M
Trailing twelve-month free cash flow.
Quarter free cash flow
$27.7M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$221.3M
Cash generated by operations before capital spending.
CapEx
$193.6M
Capital spending and related asset purchases.
FCF margin
1.7%
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 | $2.0B | $149.9M | $130.2M | $19.7M | 1.0% |
| 2022-09-30 | $2.1B | $422.8M | $159.8M | $263.0M | 12.6% |
| 2022-12-31 | $1.7B | $399.9M | $162.2M | $237.7M | 13.7% |
| 2023-03-31 | $1.6B | $221.3M | $193.6M | $27.7M | 1.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 22.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 11.7% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$3.7B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Capital Expenditure Increase
Capital expenditure was higher than both the prior quarter and the year-ago quarter, while operating cash flow did not keep pace. This combination compressed free cash flow.
If capital expenditure remains elevated without a corresponding rise in operating cash flow, free cash flow may continue to be constrained.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow was lower than the previous quarter and capital expenditure was higher, resulting in a lower free cash flow. Compared to the year-ago quarter, operating cash flow improved but capital expenditure also increased, leading to a modestly higher free cash flow.
Sequentially, free cash flow margin declined sharply as operating cash flow fell and capital expenditure rose. Year over year, the margin improved slightly as operating cash flow growth outpaced the increase in capital expenditure.
Monitor the trend of capital expenditure relative to operating cash flow, as it significantly influenced free cash flow this quarter.