Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow was positive with a healthy margin, supported by strong operating cash flow relative to capital expenditure. Compared to the prior quarter, free cash flow and margin improved, while year-over-year the company moved from negative to positive free cash flow.
- Revenue was lower than both the prior quarter and the year-ago quarter, but operating cash flow was substantially higher than a year earlier and slightly higher than the prior quarter. Capital expenditure decreased from the prior quarter but increased from a year ago, resulting in free cash flow that was higher than the prior quarter and a significant improvement from the negative free cash flow a year ago. The free cash flow margin reflected this improvement.
- Compared to the immediately preceding quarter, free cash flow and margin were higher, while revenue was slightly lower. Compared to the same quarter one year earlier, free cash flow and margin improved from negative to positive, despite lower revenue and higher capital expenditure.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.6B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.1B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.6B
Cash generated by operations before capital spending.
CapEx
$442.0M
Capital spending and related asset purchases.
FCF margin
37.5%
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 |
|---|---|---|---|---|---|
| 2022-09-30 | $4.8B | $815.0M | $296.0M | $519.0M | 10.7% |
| 2022-12-31 | $4.0B | $393.0M | $392.0M | $1.0M | 0.0% |
| 2023-03-31 | $3.1B | $1.4B | $484.0M | $951.0M | 30.6% |
| 2023-06-30 | $3.0B | $1.6B | $442.0M | $1.1B | 37.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 237.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 14.6% | 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.
Operating cash flow improvement
Operating cash flow turned from negative to positive year-over-year and was higher than the prior quarter, driving the free cash flow improvement.
This shift was the primary reason for the positive free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was lower than both the prior quarter and the year-ago quarter, but operating cash flow was substantially higher than a year earlier and slightly higher than the prior quarter. Capital expenditure decreased from the prior quarter but increased from a year ago, resulting in free cash flow that was higher than the prior quarter and a significant improvement from the negative free cash flow a year ago. The free cash flow margin reflected this improvement.
Compared to the immediately preceding quarter, free cash flow and margin were higher, while revenue was slightly lower. Compared to the same quarter one year earlier, free cash flow and margin improved from negative to positive, despite lower revenue and higher capital expenditure.
Monitor the trend in operating cash flow relative to revenue, as it was the primary factor in the free cash flow improvement.