Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was higher than both the prior quarter and the same quarter last year. Operating cash flow improved significantly year-over-year but decreased sequentially, resulting in a free cash flow margin that weakened from the prior quarter while remaining well above the year-ago period.
- Revenue rose, yet operating cash flow declined sequentially, compressing the free cash flow margin. Compared with the same quarter last year, revenue and operating cash flow were both substantially higher, and capital expenditure was lower, yielding a large positive swing in free cash flow.
- Sequentially, revenue increased while operating cash flow and free cash flow decreased, and the free cash flow margin weakened. Year-over-year, all metrics except capital expenditure improved, with free cash flow turning from negative to positive.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$7.8B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.3B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.4B
Cash generated by operations before capital spending.
CapEx
$71.0M
Capital spending and related asset purchases.
FCF margin
17.7%
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 |
|---|---|---|---|---|---|
| 2022-12-31 | $4.0B | $2.2B | $75.0M | $2.1B | 51.8% |
| 2023-03-31 | $3.8B | $2.9B | $88.0M | $2.8B | 74.1% |
| 2023-06-30 | $5.5B | $1.7B | $92.0M | $1.6B | 30.1% |
| 2023-09-30 | $7.3B | $1.4B | $71.0M | $1.3B | 17.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | n/a | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.0% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$475.0M | 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 Operating Cash Flow Recovery
Operating cash flow and free cash flow were markedly higher than the same quarter last year, driven by a significant increase in revenue and a lower capital expenditure. The free cash flow margin improved from negative to positive.
This recovery enhances the company's liquidity position, although the sequential weakening in cash generation merits attention.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue rose, yet operating cash flow declined sequentially, compressing the free cash flow margin. Compared with the same quarter last year, revenue and operating cash flow were both substantially higher, and capital expenditure was lower, yielding a large positive swing in free cash flow.
Sequentially, revenue increased while operating cash flow and free cash flow decreased, and the free cash flow margin weakened. Year-over-year, all metrics except capital expenditure improved, with free cash flow turning from negative to positive.
Monitor the sequential decline in operating cash flow as revenue continued to grow, which compressed the free cash flow margin.