Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue improved from the prior quarter and operating cash flow decreased slightly, resulting in a higher free cash flow but a lower free cash flow margin. Compared with the same quarter one year earlier, all metrics declined substantially, with free cash flow and its margin weakening markedly.
- Cash conversion weakened as operating cash flow rose less than revenue, and capital expenditure decreased, lifting free cash flow despite a lower margin relative to the prior quarter. Year-over-year, a larger drop in operating cash flow compared with revenue drove a much lower free cash flow margin.
- Revenue was higher than the prior quarter but lower than the same quarter one year earlier. Operating cash flow was lower both sequentially and year-over-year, while free cash flow was higher sequentially but significantly lower year-over-year.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$551.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
$91.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$470.0M
Cash generated by operations before capital spending.
CapEx
$379.0M
Capital spending and related asset purchases.
FCF margin
4.7%
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 | $3.4B | $889.0M | $497.0M | $392.0M | 11.6% |
| 2023-06-30 | $1.9B | $515.0M | $530.0M | -$15.0M | -0.8% |
| 2023-09-30 | $1.5B | $506.0M | $423.0M | $83.0M | 5.5% |
| 2023-12-31 | $1.9B | $470.0M | $379.0M | $91.0M | 4.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 16.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 19.5% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$949.0M | 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 reduction
Capital expenditure decreased from both the prior quarter and the year-ago quarter, which was the strongest observable factor supporting free cash flow despite a decline in operating cash flow.
Lower capital spending enabled free cash flow to remain positive and improve sequentially, but the year-over-year decline in operating cash flow still weighed heavily.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Cash conversion weakened as operating cash flow rose less than revenue, and capital expenditure decreased, lifting free cash flow despite a lower margin relative to the prior quarter. Year-over-year, a larger drop in operating cash flow compared with revenue drove a much lower free cash flow margin.
Revenue was higher than the prior quarter but lower than the same quarter one year earlier. Operating cash flow was lower both sequentially and year-over-year, while free cash flow was higher sequentially but significantly lower year-over-year.
Monitor the relationship between operating cash flow and revenue, as the current quarter showed a lower conversion rate compared with both the prior quarter and the year-ago period.