Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow was minimal despite higher revenue, as operating cash flow declined sharply and capital expenditure remained elevated. The cash conversion margin weakened significantly compared to both the prior quarter and the same quarter last year.
- Revenue increased, but operating cash flow fell substantially, resulting in a free cash flow margin that was much lower than the prior quarter and the year-ago quarter. Capital expenditure was higher than the year-ago period, further compressing free cash flow.
- Compared to the immediately preceding quarter, revenue was higher but operating cash flow was lower, and free cash flow turned sharply lower. Versus the same quarter one year earlier, revenue was higher while operating cash flow and free cash flow were both lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.3B
Trailing twelve-month free cash flow.
Quarter free cash flow
$17.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$183.0M
Cash generated by operations before capital spending.
CapEx
$166.0M
Capital spending and related asset purchases.
FCF margin
0.8%
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 |
|---|---|---|---|---|---|
| 2022-09-30 | $2.0B | $526.0M | $154.0M | $372.0M | 18.6% |
| 2022-12-31 | $2.0B | $741.0M | $171.0M | $570.0M | 27.9% |
| 2023-03-31 | $2.0B | $549.0M | $223.0M | $326.0M | 16.3% |
| 2023-06-30 | $2.2B | $183.0M | $166.0M | $17.0M | 0.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 2.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 7.6% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$4.8B | 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 Decline
Operating cash flow was substantially lower than both the prior quarter and the year-ago quarter, despite higher revenue. This was the strongest observable driver of the weakened free cash flow.
The decline in operating cash flow was the primary factor behind the sharp reduction in free cash flow and margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased, but operating cash flow fell substantially, resulting in a free cash flow margin that was much lower than the prior quarter and the year-ago quarter. Capital expenditure was higher than the year-ago period, further compressing free cash flow.
Compared to the immediately preceding quarter, revenue was higher but operating cash flow was lower, and free cash flow turned sharply lower. Versus the same quarter one year earlier, revenue was higher while operating cash flow and free cash flow were both lower.
Monitor the relationship between revenue growth and operating cash flow, as the current quarter showed a divergence with higher revenue but lower cash generation.