Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue increased relative to both the prior quarter and the same quarter last year, while free cash flow and free cash flow margin declined in both comparisons. Operating cash flow fell sequentially and year-over-year, with capital expenditure lower than the prior quarter and the year-ago period.
- Revenue growth did not translate into higher operating cash flow or free cash flow, as the free cash flow margin weakened from the previous quarter and from the same quarter a year earlier. Capital expenditure was lower in both comparisons, yet the decline in operating cash flow drove the reduction in free cash flow.
- Compared with the prior quarter, free cash flow and free cash flow margin were lower despite higher revenue. Versus the same quarter a year ago, revenue was higher but free cash flow and free cash flow margin were significantly lower, with operating cash flow also lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$6.9B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.6B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.6B
Cash generated by operations before capital spending.
CapEx
$47.0M
Capital spending and related asset purchases.
FCF margin
30.7%
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 |
|---|---|---|---|---|---|
| 2023-03-03 | $4.7B | $1.7B | $101.0M | $1.6B | 34.2% |
| 2023-06-02 | $4.8B | $2.1B | $121.0M | $2.0B | 41.9% |
| 2023-09-01 | $4.9B | $1.9B | $91.0M | $1.8B | 36.4% |
| 2023-12-01 | $5.0B | $1.6B | $47.0M | $1.6B | 30.7% |
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 | 0.9% | Lower capital intensity usually supports FCF margin. |
| Net cash | $3.5B | 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 weakening
The strongest observable driver is the decline in operating cash flow, which fell compared with both the prior quarter and the year-ago quarter. This reduction occurred while revenue rose, indicating a lower conversion of revenue into cash.
The drop in operating cash flow was the primary factor behind lower free cash flow, despite reduced capital expenditure.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue growth did not translate into higher operating cash flow or free cash flow, as the free cash flow margin weakened from the previous quarter and from the same quarter a year earlier. Capital expenditure was lower in both comparisons, yet the decline in operating cash flow drove the reduction in free cash flow.
Compared with the prior quarter, free cash flow and free cash flow margin were lower despite higher revenue. Versus the same quarter a year ago, revenue was higher but free cash flow and free cash flow margin were significantly lower, with operating cash flow also lower.
Monitor the trajectory of operating cash flow, as it declined sequentially and year-over-year even as revenue increased.