Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue and free cash flow both improved compared to the same quarter last year, while operating cash flow and free cash flow were lower than the prior quarter. The free cash flow margin strengthened year over year but weakened sequentially.
- Operating cash flow exceeded capital expenditure by a wide margin, resulting in a free cash flow margin that indicates a high rate of cash conversion from revenue. The relationship between revenue and operating cash flow shows that a substantial portion of revenue was converted into operating cash flow.
- Compared to the prior quarter, revenue was higher but operating cash flow and free cash flow were lower, leading to a weakened free cash flow margin. Versus the same quarter one year earlier, revenue, operating cash flow, free cash flow, and free cash flow margin were all higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$4.0B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.6B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.6B
Cash generated by operations before capital spending.
CapEx
$64.0M
Capital spending and related asset purchases.
FCF margin
24.4%
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 | $338.0M | $871.0M | $49.0M | $822.0M | 243.2% |
| 2023-06-30 | $352.0M | -$49.0M | $50.0M | -$99.0M | -28.1% |
| 2023-09-30 | $351.0M | $1.8B | $52.0M | $1.7B | 489.7% |
| 2023-12-31 | $6.4B | $1.6B | $64.0M | $1.6B | 24.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 202.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.0% | 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.
Year-over-Year Cash Flow Improvement
Operating cash flow and free cash flow both increased compared to the same quarter last year, with free cash flow margin also improving. This indicates a stronger cash generation profile relative to the prior year period.
The year-over-year improvement in free cash flow and margin supports a stronger cash position compared to the same quarter last year.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow exceeded capital expenditure by a wide margin, resulting in a free cash flow margin that indicates a high rate of cash conversion from revenue. The relationship between revenue and operating cash flow shows that a substantial portion of revenue was converted into operating cash flow.
Compared to the prior quarter, revenue was higher but operating cash flow and free cash flow were lower, leading to a weakened free cash flow margin. Versus the same quarter one year earlier, revenue, operating cash flow, free cash flow, and free cash flow margin were all higher.
Monitor the trend in operating cash flow relative to revenue, as it declined sequentially despite higher revenue.