Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue increased relative to the prior quarter and the year-ago quarter. Free cash flow declined versus both periods, and free cash flow margin weakened.
- Cash conversion weakened as operating cash flow was lower sequentially and significantly lower year-over-year, while capital expenditure was slightly higher sequentially. The resulting free cash flow and free cash flow margin both decreased compared with both prior periods.
- Compared with the immediately preceding quarter, revenue was higher but free cash flow was lower, reflecting a weaker cash conversion rate. Versus the same quarter one year earlier, revenue was higher but free cash flow was substantially lower, with free cash flow margin narrowing noticeably.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.1B
Trailing twelve-month free cash flow.
Quarter free cash flow
$242.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$381.0M
Cash generated by operations before capital spending.
CapEx
$139.0M
Capital spending and related asset purchases.
FCF margin
3.9%
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 |
|---|---|---|---|---|---|
| 2023-04-01 | $5.4B | $486.0M | $158.0M | $328.0M | 6.1% |
| 2023-07-01 | $5.4B | $379.0M | $125.0M | $254.0M | 4.7% |
| 2023-09-30 | $5.8B | $421.0M | $124.0M | $297.0M | 5.1% |
| 2023-12-30 | $6.2B | $381.0M | $139.0M | $242.0M | 3.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 36.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.3% | Lower capital intensity usually supports FCF margin. |
| Net cash | $1.5B | 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 contraction
Operating cash flow declined sequentially and year-over-year despite higher revenue, indicating a reduced ability to convert revenue into cash from operations. This was the primary factor behind the free cash flow decline.
Free cash flow margin contracted to its lowest level among the three quarters shown, mainly due to lower operating cash flow.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Cash conversion weakened as operating cash flow was lower sequentially and significantly lower year-over-year, while capital expenditure was slightly higher sequentially. The resulting free cash flow and free cash flow margin both decreased compared with both prior periods.
Compared with the immediately preceding quarter, revenue was higher but free cash flow was lower, reflecting a weaker cash conversion rate. Versus the same quarter one year earlier, revenue was higher but free cash flow was substantially lower, with free cash flow margin narrowing noticeably.
Monitor the trajectory of operating cash flow relative to revenue, as the gap between them widened sharply this quarter.