Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow was positive with a margin in the mid-twenties, supported by operating cash flow that exceeded capital expenditure. Revenue was substantially higher than both the prior quarter and the same quarter last year, while free cash flow improved year-over-year but declined sequentially.
- Operating cash flow was higher than capital expenditure, yielding positive free cash flow. The free cash flow margin was in the mid-twenties, reflecting the conversion of revenue into free cash flow after capital spending.
- Compared to the immediately preceding quarter, revenue was higher but operating cash flow, free cash flow, and free cash flow margin were all lower. Versus the same quarter one year earlier, revenue was higher, operating cash flow was lower, capital expenditure was lower, and free cash flow and free cash flow margin were higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.9B
Trailing twelve-month free cash flow.
Quarter free cash flow
$617.3M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.1B
Cash generated by operations before capital spending.
CapEx
$524.6M
Capital spending and related asset purchases.
FCF margin
25.1%
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 | $2.5B | $1.1B | $461.9M | $608.6M | 24.1% |
| 2023-06-30 | -$2.1B | $1.2B | $420.9M | $788.5M | -37.2% |
| 2023-09-30 | $181.0M | $1.3B | $390.7M | $909.9M | 502.7% |
| 2023-12-31 | $2.5B | $1.1B | $524.6M | $617.3M | 25.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 4641.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 21.4% | 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 vs. Cash Flow Compression
Revenue was substantially higher than both comparison periods, yet operating cash flow was lower than both the prior quarter and the year-ago quarter. This divergence between top-line growth and cash generation is the strongest observable driver of the quarter's cash conversion pattern.
The gap between higher revenue and lower operating cash flow contributed to a sequential decline in free cash flow despite a year-over-year improvement.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow was higher than capital expenditure, yielding positive free cash flow. The free cash flow margin was in the mid-twenties, reflecting the conversion of revenue into free cash flow after capital spending.
Compared to the immediately preceding quarter, revenue was higher but operating cash flow, free cash flow, and free cash flow margin were all lower. Versus the same quarter one year earlier, revenue was higher, operating cash flow was lower, capital expenditure was lower, and free cash flow and free cash flow margin were higher.
Monitor the relationship between operating cash flow and capital expenditure, as the sequential decline in free cash flow was driven by a larger drop in operating cash flow relative to the reduction in capital spending.