Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Operating cash flow strengthened sequentially and year-over-year, but capital expenditure rose sharply, resulting in a minimal free cash flow margin. The company's cash conversion was heavily weighted toward investment, compressing free cash flow to near zero.
- Revenue was stable sequentially, while operating cash flow improved. However, capital expenditure increased substantially, nearly matching operating cash flow, leaving free cash flow margin at a minimal level.
- Compared to the prior quarter, free cash flow and margin weakened significantly due to a larger increase in capital expenditure relative to operating cash flow. Compared to the same quarter a year ago, free cash flow and margin improved from negative to positive.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$436.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
$3.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$999.0M
Cash generated by operations before capital spending.
CapEx
$996.0M
Capital spending and related asset purchases.
FCF margin
0.1%
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 |
|---|---|---|---|---|---|
| 2023-03-31 | $2.2B | $692.0M | $530.0M | $162.0M | 7.3% |
| 2023-06-30 | $2.0B | $741.0M | $638.0M | $103.0M | 5.1% |
| 2023-09-30 | $2.1B | $785.0M | $617.0M | $168.0M | 8.2% |
| 2023-12-31 | $2.1B | $999.0M | $996.0M | $3.0M | 0.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 1.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 47.2% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$11.7B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Capital Expenditure Surge
Capital expenditure increased sharply from both the prior quarter and the year-ago quarter, consuming a large portion of operating cash flow.
The elevated capital expenditure level constrained free cash flow despite stronger operating cash generation.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was stable sequentially, while operating cash flow improved. However, capital expenditure increased substantially, nearly matching operating cash flow, leaving free cash flow margin at a minimal level.
Compared to the prior quarter, free cash flow and margin weakened significantly due to a larger increase in capital expenditure relative to operating cash flow. Compared to the same quarter a year ago, free cash flow and margin improved from negative to positive.
Monitor the magnitude of capital expenditure relative to operating cash flow, as it nearly absorbed all cash generated from operations.