Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow and its margin improved markedly from both the prior quarter and the same quarter a year earlier, driven by a substantial rise in operating cash flow. Revenue was slightly lower sequentially but higher year over year, while capital expenditure increased versus both comparison periods.
- Revenue conversion into operating cash flow strengthened considerably, as operating cash flow rose while revenue remained relatively stable. The resulting free cash flow and free cash flow margin both improved, despite higher capital expenditure.
- Compared with the immediately preceding quarter, free cash flow increased sharply and the free cash flow margin widened. Versus the same quarter one year earlier, both free cash flow and its margin were also higher, with operating cash flow the primary driver of improvement.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$859.3M
Trailing twelve-month free cash flow.
Quarter free cash flow
$480.9M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$625.4M
Cash generated by operations before capital spending.
CapEx
$144.5M
Capital spending and related asset purchases.
FCF margin
8.3%
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 | $5.5B | $222.4M | $95.6M | $126.7M | 2.3% |
| 2023-03-31 | $5.8B | $197.5M | $88.1M | $109.4M | 1.9% |
| 2023-06-30 | $5.9B | $259.5M | $117.2M | $142.3M | 2.4% |
| 2023-09-30 | $5.8B | $625.4M | $144.5M | $480.9M | 8.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 136.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.5% | 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.
Operating cash flow strength
Operating cash flow rose substantially from both comparison periods, far outpacing the increase in capital expenditure. This drove a significant improvement in free cash flow and free cash flow margin.
The higher operating cash flow was the primary factor behind the improved free cash flow generation this quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue conversion into operating cash flow strengthened considerably, as operating cash flow rose while revenue remained relatively stable. The resulting free cash flow and free cash flow margin both improved, despite higher capital expenditure.
Compared with the immediately preceding quarter, free cash flow increased sharply and the free cash flow margin widened. Versus the same quarter one year earlier, both free cash flow and its margin were also higher, with operating cash flow the primary driver of improvement.
Monitor capital expenditure levels, which increased from both the prior quarter and the year-ago period, to assess whether this trend continues and its effect on future free cash flow.