Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue and free cash flow margin both improved compared to the prior quarter and the same quarter last year. Operating cash flow increased year over year, while capital expenditure was slightly higher than a year ago but lower than the prior quarter.
- Revenue was higher than both the prior quarter and the year-ago quarter. Operating cash flow increased year over year, and capital expenditure was lower than the prior quarter but slightly higher than a year ago. Free cash flow and free cash flow margin both improved sequentially and year over year.
- Compared to the prior quarter, revenue, operating cash flow, free cash flow, and free cash flow margin all increased, while capital expenditure decreased. Compared to the same quarter last year, revenue, operating cash flow, free cash flow, and free cash flow margin all increased, while capital expenditure was slightly higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.2B
Trailing twelve-month free cash flow.
Quarter free cash flow
$461.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$531.0M
Cash generated by operations before capital spending.
CapEx
$70.0M
Capital spending and related asset purchases.
FCF margin
16.9%
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 |
|---|---|---|---|---|---|
| 2023-03-31 | $2.4B | $479.0M | $172.0M | $307.0M | 12.6% |
| 2023-06-30 | $4.8B | $351.0M | $156.0M | $195.0M | 4.1% |
| 2023-09-30 | $414.0M | $365.0M | $174.0M | $191.0M | 46.1% |
| 2023-12-31 | $2.7B | $531.0M | $70.0M | $461.0M | 16.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 188.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.6% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$10.8B | 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 improvement
Operating cash flow increased year over year and sequentially, supporting higher free cash flow. The filing notes that operating cash flows from continuing operations increased in 2023 compared to 2022 primarily due to a decrease in net loss from continuing operations, lower annual payouts under employee incentive compensation plans, timing of accounts payable payments, and lower increases in inventory and accounts receivable balances compared to the prior year.
Higher operating cash flow was the strongest observable driver of the improved free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher than both the prior quarter and the year-ago quarter. Operating cash flow increased year over year, and capital expenditure was lower than the prior quarter but slightly higher than a year ago. Free cash flow and free cash flow margin both improved sequentially and year over year.
Compared to the prior quarter, revenue, operating cash flow, free cash flow, and free cash flow margin all increased, while capital expenditure decreased. Compared to the same quarter last year, revenue, operating cash flow, free cash flow, and free cash flow margin all increased, while capital expenditure was slightly higher.
Monitor the trend in capital expenditure relative to operating cash flow, as it decreased sharply from the prior quarter but remained slightly above the year-ago level.