Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow for the quarter weakened sequentially and declined from the same quarter last year, while revenue increased slightly from the prior quarter. The free cash flow margin contracted compared with both the immediately preceding quarter and the year-ago period.
- Revenue increased from the prior quarter, but operating cash flow was lower, leading to a drop in free cash flow despite a slightly lower capital expenditure. The conversion of revenue into free cash flow weakened as operating cash flow did not keep pace with higher revenue.
- Compared with the immediately preceding quarter, revenue was higher while operating cash flow, free cash flow, and free cash flow margin were lower. Versus the same quarter one year earlier, revenue was slightly higher but all cash flow metrics were lower, with the margin contracting significantly.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$7.9B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.6B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.8B
Cash generated by operations before capital spending.
CapEx
$122.0M
Capital spending and related asset purchases.
FCF margin
23.2%
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 |
|---|---|---|---|---|---|
| 2022-12-31 | $7.4B | $2.6B | $181.0M | $2.4B | 32.3% |
| 2023-03-31 | $6.4B | $1.7B | $109.0M | $1.6B | 25.7% |
| 2023-06-30 | $6.6B | $2.3B | $139.0M | $2.2B | 33.3% |
| 2023-09-30 | $7.1B | $1.8B | $122.0M | $1.6B | 23.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 74.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.7% | 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.
Weakening operating cash flow conversion
Operating cash flow declined from both the prior quarter and the year-ago period, while revenue was higher or stable. This lower cash conversion is the most observable driver of the reduced free cash flow and margin.
The weakened cash conversion directly reduced free cash flow and compressed the free cash flow margin for the quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased from the prior quarter, but operating cash flow was lower, leading to a drop in free cash flow despite a slightly lower capital expenditure. The conversion of revenue into free cash flow weakened as operating cash flow did not keep pace with higher revenue.
Compared with the immediately preceding quarter, revenue was higher while operating cash flow, free cash flow, and free cash flow margin were lower. Versus the same quarter one year earlier, revenue was slightly higher but all cash flow metrics were lower, with the margin contracting significantly.
Monitor the trend in operating cash flow, as it weakened despite higher revenue and is the primary driver of free cash flow.