Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Operating cash flow increased from the prior quarter and from the same quarter one year earlier, while capital expenditure decreased sequentially. Free cash flow and free cash flow margin both improved compared to the prior quarter and the year-ago quarter.
- Revenue was higher than the prior quarter and the year-ago quarter, while operating cash flow grew more strongly, leading to a higher free cash flow. The free cash flow margin improved sequentially and year-over-year, indicating a higher rate of revenue conversion into free cash flow.
- Compared to the immediately preceding quarter, all metrics improved: revenue was higher, operating cash flow was significantly higher, capital expenditure was lower, and free cash flow and free cash flow margin were higher. Versus the same quarter one year earlier, revenue, operating cash flow, free cash flow, and free cash flow margin were all higher, while capital expenditure was lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.6B
Trailing twelve-month free cash flow.
Quarter free cash flow
$991.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.2B
Cash generated by operations before capital spending.
CapEx
$161.0M
Capital spending and related asset purchases.
FCF margin
20.2%
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 |
|---|---|---|---|---|---|
| 2022-12-31 | $4.6B | $673.0M | $221.0M | $452.0M | 9.8% |
| 2023-03-31 | $4.8B | $735.0M | $163.0M | $572.0M | 12.0% |
| 2023-06-30 | $4.8B | $722.0M | $184.0M | $538.0M | 11.2% |
| 2023-09-30 | $4.9B | $1.2B | $161.0M | $991.0M | 20.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 140.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.3% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$7.8B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Stronger Operating Cash Flow
Operating cash flow was significantly higher than the prior quarter and higher than the year-ago quarter, while revenue growth was more moderate. The filing context notes that net cash provided by operations increased in the first nine months of the current fiscal year versus the prior year period due to an improvement in working capital.
The elevated operating cash flow was the primary factor behind the improvement in free cash flow and 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 the prior quarter and the year-ago quarter, while operating cash flow grew more strongly, leading to a higher free cash flow. The free cash flow margin improved sequentially and year-over-year, indicating a higher rate of revenue conversion into free cash flow.
Compared to the immediately preceding quarter, all metrics improved: revenue was higher, operating cash flow was significantly higher, capital expenditure was lower, and free cash flow and free cash flow margin were higher. Versus the same quarter one year earlier, revenue, operating cash flow, free cash flow, and free cash flow margin were all higher, while capital expenditure was lower.
Monitor capital expenditure trends relative to operating cash flow, as capital expenditure was lower in the current quarter versus both comparison periods.