Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue declined from both the prior quarter and the same quarter last year. Operating cash flow turned positive and increased sequentially, leading to a significant improvement in free cash flow and margin.
- The company converted a substantial portion of revenue into operating cash flow, with capital expenditure remaining low. This resulted in a strong free cash flow margin.
- Compared to the prior quarter, revenue was lower but operating cash flow and free cash flow were higher, with free cash flow margin improving. Versus the same quarter last year, revenue was lower, while operating cash flow shifted from negative to positive, and free cash flow turned positive from negative.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$173.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
$580.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$599.0M
Cash generated by operations before capital spending.
CapEx
$19.0M
Capital spending and related asset purchases.
FCF margin
20.9%
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 |
|---|---|---|---|---|---|
| 2022-12-31 | $2.8B | -$739.0M | $61.0M | -$800.0M | -28.2% |
| 2023-03-31 | $2.6B | -$66.0M | $32.0M | -$98.0M | -3.8% |
| 2023-06-30 | $3.0B | $509.0M | $18.0M | $491.0M | 16.5% |
| 2023-09-30 | $2.8B | $599.0M | $19.0M | $580.0M | 20.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 74.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.7% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$5.3B | 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 Turnaround
Operating cash flow improved sharply from a negative level a year ago and increased from the prior quarter, despite lower revenue. This was the primary factor behind the positive free cash flow.
The improvement in operating cash flow drove free cash flow to a positive amount and raised the free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
The company converted a substantial portion of revenue into operating cash flow, with capital expenditure remaining low. This resulted in a strong free cash flow margin.
Compared to the prior quarter, revenue was lower but operating cash flow and free cash flow were higher, with free cash flow margin improving. Versus the same quarter last year, revenue was lower, while operating cash flow shifted from negative to positive, and free cash flow turned positive from negative.
Monitor the sustainability of operating cash flow given the decline in revenue.