Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue and operating cash flow were unchanged from the prior quarter, but free cash flow margin improved slightly. Compared to the same quarter last year, free cash flow and its margin declined despite higher revenue.
- Operating cash flow remained stable both sequentially and year-over-year, while capital spending increased compared to the prior year, causing a lower free cash flow conversion rate.
- Sequentially, free cash flow margin improved modestly due to a marginally lower capital outlay. Year over year, the margin contracted as capital spending grew faster than operating cash flow.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$3.8B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.2B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.6B
Cash generated by operations before capital spending.
CapEx
$354.0M
Capital spending and related asset purchases.
FCF margin
25.2%
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 |
|---|---|---|---|---|---|
| 2023-03-31 | $4.5B | $1.1B | $339.0M | $791.0M | 17.4% |
| 2023-06-30 | $4.8B | $878.0M | $340.0M | $538.0M | 11.3% |
| 2023-09-30 | $4.9B | $1.6B | $355.0M | $1.2B | 24.7% |
| 2023-12-31 | $4.9B | $1.6B | $354.0M | $1.2B | 25.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 142.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 7.2% | 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.
Capital Expenditure Growth
Capital spending increased compared to the same quarter a year ago, exceeding the growth in operating cash flow and compressing free cash flow margins.
If capital expenditure continues to rise without a corresponding increase in operating cash flow, free cash flow may remain pressured.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow remained stable both sequentially and year-over-year, while capital spending increased compared to the prior year, causing a lower free cash flow conversion rate.
Sequentially, free cash flow margin improved modestly due to a marginally lower capital outlay. Year over year, the margin contracted as capital spending grew faster than operating cash flow.
Monitor the trajectory of capital expenditure relative to operating cash flow, as it directly influences free cash flow generation.