Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned positive this quarter, supported by higher operating cash flow and lower capital expenditure. The free cash flow margin improved from negative levels in both the prior quarter and the same quarter last year.
- Revenue increased compared to the prior quarter, while operating cash flow rose at a faster pace, leading to a higher free cash flow margin. Capital expenditure declined from both the prior quarter and the year-ago quarter, further supporting cash conversion.
- Compared to the prior quarter, revenue, operating cash flow, and free cash flow all improved, with free cash flow turning from negative to positive. Versus the same quarter last year, operating cash flow was higher and capital expenditure was lower, resulting in a stronger free cash flow position.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$790.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
$171.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$920.0M
Cash generated by operations before capital spending.
CapEx
$749.0M
Capital spending and related asset purchases.
FCF margin
8.3%
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 |
|---|---|---|---|---|---|
| 2022-12-31 | $2.0B | $664.0M | $914.0M | -$250.0M | -12.2% |
| 2023-03-31 | $2.1B | $496.0M | $931.0M | -$435.0M | -21.1% |
| 2023-06-30 | $1.8B | $615.0M | $891.0M | -$276.0M | -15.7% |
| 2023-09-30 | $2.1B | $920.0M | $749.0M | $171.0M | 8.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 34.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 36.4% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$14.7B | 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 strength
Operating cash flow increased from both the prior quarter and the year-ago quarter, while revenue was higher than the prior quarter but lower than the year-ago quarter. This improvement in cash generation was the strongest observable factor behind the positive free cash flow.
Higher operating cash flow, combined with reduced capital expenditure, drove free cash flow from negative to positive.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased compared to the prior quarter, while operating cash flow rose at a faster pace, leading to a higher free cash flow margin. Capital expenditure declined from both the prior quarter and the year-ago quarter, further supporting cash conversion.
Compared to the prior quarter, revenue, operating cash flow, and free cash flow all improved, with free cash flow turning from negative to positive. Versus the same quarter last year, operating cash flow was higher and capital expenditure was lower, resulting in a stronger free cash flow position.
Monitor whether operating cash flow can sustain its current level relative to revenue in subsequent quarters.