Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow remained stable sequentially, while the margin improved. Compared to the same quarter a year ago, free cash flow and margin were lower.
- Operating cash flow was substantially higher than capital expenditure, allowing free cash flow to be nearly equal to operating cash flow. The free cash flow margin reflects the proportion of revenue converted into free cash flow.
- Sequentially, revenue and operating cash flow decreased, while free cash flow was unchanged and the margin improved. Year over year, revenue increased, but operating cash flow and free cash flow decreased, leading to a lower margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$7.0B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.3B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.3B
Cash generated by operations before capital spending.
CapEx
$94.0M
Capital spending and related asset purchases.
FCF margin
26.2%
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 | $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% |
| 2023-12-31 | $4.8B | $1.3B | $94.0M | $1.3B | 26.2% |
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 | 2.0% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$2.1B | 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 Weakening
Compared to the same quarter a year ago, free cash flow was lower even though revenue was higher, resulting in a lower free cash flow margin.
The lower free cash flow margin indicates a smaller proportion of revenue was converted to free cash flow compared to the prior year.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow was substantially higher than capital expenditure, allowing free cash flow to be nearly equal to operating cash flow. The free cash flow margin reflects the proportion of revenue converted into free cash flow.
Sequentially, revenue and operating cash flow decreased, while free cash flow was unchanged and the margin improved. Year over year, revenue increased, but operating cash flow and free cash flow decreased, leading to a lower margin.
The impact of foreign currency exchange rate fluctuations on reported financial results, as noted in the filing, is a factor to monitor.