Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned positive from the prior quarter, driven by a significant rise in operating cash flow. However, free cash flow margin weakened compared to the same quarter last year, as operating cash flow declined despite higher revenue.
- Revenue increased, and operating cash flow improved markedly, resulting in positive free cash flow after capital expenditure. The free cash flow margin moved from negative to positive, reflecting stronger cash conversion efficiency this quarter.
- Compared to the immediate prior quarter, revenue, operating cash flow, and free cash flow all improved, with free cash flow margin shifting from negative to positive. Versus the same quarter a year ago, revenue was higher, but operating cash flow and free cash flow were lower, resulting in a weakened free cash flow margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$784.5M
Trailing twelve-month free cash flow.
Quarter free cash flow
$214.2M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$561.1M
Cash generated by operations before capital spending.
CapEx
$346.9M
Capital spending and related asset purchases.
FCF margin
18.5%
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 | $548.3M | -$34.6M | $371.0M | -$405.6M | -74.0% |
| 2023-06-30 | $810.7M | -$89.7M | $382.7M | -$472.4M | -58.3% |
| 2023-09-30 | $801.1M | $165.4M | $286.2M | -$120.8M | -15.1% |
| 2023-12-31 | $1.2B | $561.1M | $346.9M | $214.2M | 18.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 61.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 29.9% | Lower capital intensity usually supports FCF margin. |
| Net cash | $1.4B | 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 Surge
Operating cash flow increased sharply from the prior quarter, far outpacing the rise in capital expenditure, enabling free cash flow to turn positive. This improvement was the strongest observable driver of the quarter's cash conversion.
Sustaining a similar level of operating cash flow would support continued positive free cash flow, assuming capital expenditure remains near current levels.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased, and operating cash flow improved markedly, resulting in positive free cash flow after capital expenditure. The free cash flow margin moved from negative to positive, reflecting stronger cash conversion efficiency this quarter.
Compared to the immediate prior quarter, revenue, operating cash flow, and free cash flow all improved, with free cash flow margin shifting from negative to positive. Versus the same quarter a year ago, revenue was higher, but operating cash flow and free cash flow were lower, resulting in a weakened free cash flow margin.
Monitor capital expenditure trends, as the current quarter's spending was higher than both the prior quarter and the year-ago quarter, which could pressure future free cash flow if operating cash flow does not sustain its improvement.