Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue and operating cash flow both increased compared to the prior quarter and the same quarter last year. Free cash flow margin improved year over year but weakened slightly from the preceding quarter.
- Operating cash flow exceeded capital expenditure by a wide margin, resulting in free cash flow that was nearly equal to operating cash flow. The free cash flow margin was supported by the conversion of revenue into operating cash flow.
- Compared to the preceding quarter, revenue was higher while operating cash flow and free cash flow were stable, leading to a slightly lower free cash flow margin. Versus the same quarter one year earlier, all metrics were higher, and the free cash flow margin improved.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$4.0B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.2B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.2B
Cash generated by operations before capital spending.
CapEx
$71.0M
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 |
|---|---|---|---|---|---|
| 2023-03-31 | $13.8B | $601.0M | $79.0M | $522.0M | 3.8% |
| 2023-06-30 | $14.0B | $1.2B | $62.0M | $1.1B | 7.9% |
| 2023-09-30 | $14.5B | $1.2B | $55.0M | $1.2B | 8.1% |
| 2023-12-31 | $14.8B | $1.2B | $71.0M | $1.2B | 7.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 77.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.5% | 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.
Revenue Growth
Revenue increased from both the prior quarter and the year-ago quarter, providing a larger base for cash generation. Operating cash flow rose in line with revenue, supporting free cash flow.
Higher revenue was the strongest observable driver of the improved free cash flow compared to the year-ago quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow exceeded capital expenditure by a wide margin, resulting in free cash flow that was nearly equal to operating cash flow. The free cash flow margin was supported by the conversion of revenue into operating cash flow.
Compared to the preceding quarter, revenue was higher while operating cash flow and free cash flow were stable, leading to a slightly lower free cash flow margin. Versus the same quarter one year earlier, all metrics were higher, and the free cash flow margin improved.
Monitor the trend in capital expenditure relative to operating cash flow, as it remained low in both the current and prior periods.