Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Operating cash flow rose while revenue declined, lifting free cash flow and margin compared to both the prior quarter and the same quarter a year ago. The sharp reduction in capital expenditure from the preceding quarter was the main factor behind the swing from negative to positive free cash flow.
- Revenue was lower than the prior quarter, but operating cash flow increased, resulting in a higher cash conversion rate. With capital expenditure substantially reduced, free cash flow turned positive and the free cash flow margin improved significantly.
- Compared to the preceding quarter, revenue was lower, operating cash flow was higher, and capital expenditure dropped sharply, yielding a positive free cash flow versus a negative one. Versus the same quarter one year earlier, revenue was lower but operating cash flow and free cash flow were both higher, with an improved margin.
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
$969.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.5B
Cash generated by operations before capital spending.
CapEx
$545.0M
Capital spending and related asset purchases.
FCF margin
31.1%
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 | $4.6B | $1.1B | $315.0M | $783.0M | 17.1% |
| 2022-09-30 | $5.0B | $1.5B | $841.0M | $649.0M | 13.1% |
| 2022-12-31 | $4.1B | $1.2B | $2.2B | -$932.0M | -22.6% |
| 2023-03-31 | $3.1B | $1.5B | $545.0M | $969.0M | 31.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 104.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 17.5% | 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.
Operating cash flow improvement
Operating cash flow increased while revenue declined, reflecting stronger cash generation from operations. This, combined with a materially lower capital expenditure, drove the free cash flow margin higher.
The improvement in operating cash flow and the reduction in capital expenditure were the key drivers of the positive free cash flow and margin expansion.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was lower than the prior quarter, but operating cash flow increased, resulting in a higher cash conversion rate. With capital expenditure substantially reduced, free cash flow turned positive and the free cash flow margin improved significantly.
Compared to the preceding quarter, revenue was lower, operating cash flow was higher, and capital expenditure dropped sharply, yielding a positive free cash flow versus a negative one. Versus the same quarter one year earlier, revenue was lower but operating cash flow and free cash flow were both higher, with an improved margin.
Monitor the trend of capital expenditure relative to operating cash flow, as it swung significantly between the current and prior quarter.