Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
The most recent quarter showed a decline in revenue and free cash flow compared to the preceding quarter, resulting in a weakened cash conversion margin. However, compared to the same quarter a year earlier, free cash flow improved due to higher operating cash flow and lower capital expenditure, with the margin expanding.
- Revenue was stable relative to the year-ago quarter, while operating cash flow increased and capital expenditure decreased, leading to higher free cash flow and an improved free cash flow margin. Sequentially, revenue declined, operating cash flow fell, and free cash flow and margin both weakened.
- Compared to the preceding quarter, revenue, operating cash flow, free cash flow, and free cash flow margin were all lower. Compared to the same quarter a year earlier, revenue was stable, while operating cash flow, free cash flow, and margin were higher, and capital expenditure was lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.0B
Trailing twelve-month free cash flow.
Quarter free cash flow
$659.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$737.0M
Cash generated by operations before capital spending.
CapEx
$78.0M
Capital spending and related asset purchases.
FCF margin
13.9%
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 | $4.8B | $729.0M | $98.0M | $631.0M | 13.1% |
| 2023-06-30 | $4.9B | $36.0M | $68.0M | -$32.0M | -0.7% |
| 2023-09-30 | $4.9B | $828.0M | $73.0M | $755.0M | 15.4% |
| 2023-12-31 | $4.8B | $737.0M | $78.0M | $659.0M | 13.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 118.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.6% | Lower capital intensity usually supports FCF margin. |
| Net cash | n/a | 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 variability
Operating cash flow improved year-over-year but weakened sequentially. The filing indicated that full-year operating cash flow was lower due to higher income tax payments, suggesting that quarterly cash flow may be influenced by tax timing.
The sustainability of free cash flow improvement depends on the normalization of tax-related cash outflows.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was stable relative to the year-ago quarter, while operating cash flow increased and capital expenditure decreased, leading to higher free cash flow and an improved free cash flow margin. Sequentially, revenue declined, operating cash flow fell, and free cash flow and margin both weakened.
Compared to the preceding quarter, revenue, operating cash flow, free cash flow, and free cash flow margin were all lower. Compared to the same quarter a year earlier, revenue was stable, while operating cash flow, free cash flow, and margin were higher, and capital expenditure was lower.
Monitor income tax payments, as the filing attributed the full-year decline in operating cash flow to higher tax outflows, which could affect future quarterly cash generation.