Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Cash conversion weakened compared to both the prior quarter and the same quarter a year earlier. Revenue increased but operating cash flow decreased, leading to lower free cash flow and a narrower free cash flow margin.
- Revenue was higher than both the prior quarter and the year-ago quarter, while operating cash flow was lower than both. Capital expenditure was higher than the prior quarter but lower than a year ago. Free cash flow and free cash flow margin were lower than both comparable periods.
- Compared to the prior quarter, revenue was higher but operating cash flow, free cash flow, and free cash flow margin were all lower. Versus the same quarter a year earlier, revenue was higher while operating cash flow, free cash flow, and free cash flow margin were lower; capital expenditure was lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$3.9B
Trailing twelve-month free cash flow.
Quarter free cash flow
$857.8M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$899.9M
Cash generated by operations before capital spending.
CapEx
$42.1M
Capital spending and related asset purchases.
FCF margin
36.1%
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 | $2.2B | $1.1B | $53.3M | $1.1B | 49.5% |
| 2022-09-30 | $2.3B | $955.5M | $54.2M | $901.3M | 38.6% |
| 2022-12-31 | $2.3B | $1.1B | $33.6M | $1.0B | 45.4% |
| 2023-03-31 | $2.4B | $899.9M | $42.1M | $857.8M | 36.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 122.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.8% | 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.
Cash Conversion Efficiency
Revenue increased relative to both prior periods, but operating cash flow decreased, causing free cash flow and free cash flow margin to weaken. The filing notes that working capital decreased due to increased investment in marketable securities and share repurchases, partially offset by operating cash flow.
The company generated less cash per dollar of revenue compared to both the prior quarter and the same quarter a year earlier.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher than both the prior quarter and the year-ago quarter, while operating cash flow was lower than both. Capital expenditure was higher than the prior quarter but lower than a year ago. Free cash flow and free cash flow margin were lower than both comparable periods.
Compared to the prior quarter, revenue was higher but operating cash flow, free cash flow, and free cash flow margin were all lower. Versus the same quarter a year earlier, revenue was higher while operating cash flow, free cash flow, and free cash flow margin were lower; capital expenditure was lower.
Monitor the trend in operating cash flow, which declined despite higher revenue, as it directly affects free cash flow generation.