Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue remained stable sequentially but operating cash flow was unchanged, while free cash flow improved significantly from the prior quarter due to lower capital expenditure. Compared to the same quarter last year, free cash flow was lower despite higher revenue, as operating cash flow decreased and capital spending increased.
- Revenue was flat sequentially and higher year-over-year. Operating cash flow was unchanged from the prior quarter but lower than the year-ago quarter. Capital expenditure decreased from the previous quarter but increased from a year ago, resulting in free cash flow and its margin improving sequentially but weakening on an annual basis.
- Compared to the previous quarter, free cash flow and margin improved, driven by lower capital expenditure with revenue and operating cash flow unchanged. Compared to the same quarter last year, free cash flow and margin weakened as operating cash flow was lower and capital expenditure was higher despite revenue growth.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.5B
Trailing twelve-month free cash flow.
Quarter free cash flow
$384.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.0B
Cash generated by operations before capital spending.
CapEx
$660.0M
Capital spending and related asset purchases.
FCF margin
7.8%
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 |
|---|---|---|---|---|---|
| 2022-06-30 | $5.0B | $1.0B | $550.0M | $497.0M | 9.9% |
| 2022-09-30 | $5.1B | $1.2B | $757.0M | $425.0M | 8.4% |
| 2022-12-31 | $4.9B | $1.0B | $862.0M | $187.0M | 3.8% |
| 2023-03-31 | $4.9B | $1.0B | $660.0M | $384.0M | 7.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 72.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 13.5% | 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.
Lower Capital Expenditure
Capital expenditure in the current quarter was lower than the prior quarter, which directly contributed to the sequential improvement in free cash flow despite stable revenue and operating cash flow.
This reduction in capital spending was the strongest observable driver of the sequential free cash flow increase.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was flat sequentially and higher year-over-year. Operating cash flow was unchanged from the prior quarter but lower than the year-ago quarter. Capital expenditure decreased from the previous quarter but increased from a year ago, resulting in free cash flow and its margin improving sequentially but weakening on an annual basis.
Compared to the previous quarter, free cash flow and margin improved, driven by lower capital expenditure with revenue and operating cash flow unchanged. Compared to the same quarter last year, free cash flow and margin weakened as operating cash flow was lower and capital expenditure was higher despite revenue growth.
Monitor the trajectory of capital expenditure given its significant swing between periods and direct impact on free cash flow.