Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was stable compared to the prior quarter, while operating cash flow and free cash flow were lower, resulting in a weakened free cash flow margin. Versus the same quarter one year earlier, revenue was higher and both operating cash flow and free cash flow improved significantly, with a much stronger margin.
- Revenue remained unchanged from the prior quarter, but operating cash flow was lower, leading to a decline in free cash flow and free cash flow margin. Capital expenditure was slightly reduced, which partially offset the cash flow decrease.
- Compared to the prior quarter, free cash flow margin weakened as operating cash flow decreased while revenue was stable. Compared to the same quarter one year earlier, free cash flow margin improved substantially, driven by a large increase in operating cash flow relative to revenue growth.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.0B
Trailing twelve-month free cash flow.
Quarter free cash flow
$520.5M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$526.5M
Cash generated by operations before capital spending.
CapEx
$6.0M
Capital spending and related asset purchases.
FCF margin
33.8%
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 | $1.4B | $374.5M | $5.6M | $368.9M | 27.3% |
| 2023-06-30 | $1.5B | $434.1M | $11.6M | $422.5M | 29.0% |
| 2023-09-30 | $1.5B | $699.0M | $11.2M | $687.8M | 45.6% |
| 2023-12-31 | $1.5B | $526.5M | $6.0M | $520.5M | 33.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 84.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.4% | 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.
Year-over-year cash flow improvement
Operating cash flow and free cash flow were substantially higher compared to the same quarter one year earlier, with free cash flow margin rising from a low level. This improvement occurred alongside higher revenue.
The year-over-year increase in free cash flow was the strongest observable driver of the quarter's performance.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue remained unchanged from the prior quarter, but operating cash flow was lower, leading to a decline in free cash flow and free cash flow margin. Capital expenditure was slightly reduced, which partially offset the cash flow decrease.
Compared to the prior quarter, free cash flow margin weakened as operating cash flow decreased while revenue was stable. Compared to the same quarter one year earlier, free cash flow margin improved substantially, driven by a large increase in operating cash flow relative to revenue growth.
Monitor the trend in operating cash flow relative to revenue, as it declined from the prior quarter despite stable revenue.