Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow margin improved substantially compared to the same quarter last year, though it declined from the prior quarter. Revenue grew both sequentially and year over year.
- Revenue was higher than both the preceding quarter and the year-ago quarter. Operating cash flow was lower than the previous quarter but higher than the same quarter last year. Capital expenditure increased sequentially but decreased year over year. The resulting free cash flow and margin were lower than the prior quarter but significantly higher than a year earlier.
- Compared to the immediately preceding quarter, free cash flow and margin weakened due to lower operating cash flow and higher capital expenditure. Compared to the same quarter one year earlier, all metrics improved, with free cash flow and margin rising sharply.
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
$892.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.2B
Cash generated by operations before capital spending.
CapEx
$304.0M
Capital spending and related asset purchases.
FCF margin
7.6%
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 |
|---|---|---|---|---|---|
| 2023-04-02 | $9.9B | $1.5B | $161.0M | $1.3B | 13.2% |
| 2023-07-02 | $10.2B | $731.0M | $212.0M | $519.0M | 5.1% |
| 2023-10-01 | $10.6B | $1.3B | $227.0M | $1.1B | 10.3% |
| 2023-12-31 | $11.7B | $1.2B | $304.0M | $892.0M | 7.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 88.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.6% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$7.4B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Year-over-year operating cash flow improvement
Operating cash flow was markedly higher than the same quarter last year, while capital expenditure was lower, driving a substantial increase in free cash flow. This aligns with the company's filing emphasis on cash flow generation, supported by cost control and working capital management.
The improvement in cash conversion provides flexibility for the company's stated capital deployment priorities, including investments, dividends, and debt reduction.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher than both the preceding quarter and the year-ago quarter. Operating cash flow was lower than the previous quarter but higher than the same quarter last year. Capital expenditure increased sequentially but decreased year over year. The resulting free cash flow and margin were lower than the prior quarter but significantly higher than a year earlier.
Compared to the immediately preceding quarter, free cash flow and margin weakened due to lower operating cash flow and higher capital expenditure. Compared to the same quarter one year earlier, all metrics improved, with free cash flow and margin rising sharply.
Monitor the trajectory of operating cash flow, which declined sequentially after a strong year-over-year increase.