Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow improved sharply versus both prior quarter and year-ago period, driven by stronger operating cash flow and reduced capital expenditures relative to the prior year. Revenue was lower in both comparisons but cash conversion strengthened.
- The company converted a lower revenue base into higher operating cash flow and free cash flow, resulting in a significantly improved free cash flow margin even as capital spending increased from the prior quarter.
- Compared to the immediately preceding quarter, revenue fell but free cash flow rose as operating cash flow growth outpaced higher capital spending. Versus the same quarter a year earlier, revenue also declined while free cash flow surged due to both higher operating cash flow and lower capital expenditures.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$689.4M
Trailing twelve-month free cash flow.
Quarter free cash flow
$383.9M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$958.2M
Cash generated by operations before capital spending.
CapEx
$574.3M
Capital spending and related asset purchases.
FCF margin
21.0%
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 | $2.0B | $296.9M | $671.9M | -$375.0M | -18.7% |
| 2022-12-31 | $2.6B | $1.2M | $996.2M | -$995.0M | -38.9% |
| 2023-03-31 | $2.9B | $796.1M | $499.4M | $296.7M | 10.3% |
| 2023-06-30 | $1.8B | $958.2M | $574.3M | $383.9M | 21.0% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 132.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 31.4% | 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.
Improved Cash Conversion
Operating cash flow increased while capital expenditures decreased year-over-year, driving a substantial rise in free cash flow and margin even as revenue contracted.
The stronger cash generation provides greater financial flexibility despite a lower revenue base.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
The company converted a lower revenue base into higher operating cash flow and free cash flow, resulting in a significantly improved free cash flow margin even as capital spending increased from the prior quarter.
Compared to the immediately preceding quarter, revenue fell but free cash flow rose as operating cash flow growth outpaced higher capital spending. Versus the same quarter a year earlier, revenue also declined while free cash flow surged due to both higher operating cash flow and lower capital expenditures.
Monitor the company's ability to maintain liquidity given that current liabilities exceeded current assets at quarter end.