Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue and operating cash flow both decreased from the prior quarter, leading to a lower free cash flow and a weakened margin. Compared to the same quarter last year, revenue and operating cash flow were higher, but free cash flow margin was lower.
- Operating cash flow as a proportion of revenue was lower than the prior quarter but higher than the same quarter last year. Capital expenditure was relatively stable across periods, so the change in free cash flow primarily reflected the movement in operating cash flow.
- Compared to the immediately preceding quarter, revenue, operating cash flow, free cash flow, and margin all declined. Versus the same quarter one year earlier, revenue and operating cash flow were higher, while free cash flow margin was lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$3.6B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.0B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.1B
Cash generated by operations before capital spending.
CapEx
$62.7M
Capital spending and related asset purchases.
FCF margin
40.1%
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 |
|---|---|---|---|---|---|
| 2022-12-31 | $1.7B | $715.1M | $48.7M | $666.4M | 39.1% |
| 2023-03-31 | $1.4B | $352.7M | $69.6M | $283.2M | 20.5% |
| 2023-06-30 | $2.8B | $1.7B | $60.7M | $1.7B | 59.2% |
| 2023-09-30 | $2.5B | $1.1B | $62.7M | $1.0B | 40.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 184.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.5% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$9.4B | 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 Decline
The decrease in operating cash flow from the prior quarter was the strongest observable driver of the lower free cash flow and margin. Revenue also fell, but the drop in operating cash flow was proportionally larger.
Free cash flow and margin both declined as a result of the lower operating cash flow.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a proportion of revenue was lower than the prior quarter but higher than the same quarter last year. Capital expenditure was relatively stable across periods, so the change in free cash flow primarily reflected the movement in operating cash flow.
Compared to the immediately preceding quarter, revenue, operating cash flow, free cash flow, and margin all declined. Versus the same quarter one year earlier, revenue and operating cash flow were higher, while free cash flow margin was lower.
Monitor the trend in operating cash flow relative to revenue, as the conversion rate weakened from the prior quarter.