Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow margin declined from the prior quarter and the year-ago quarter, as operating cash flow decreased while capital expenditure increased. The company's annual report includes management discussion of financial condition and liquidity.
- Operating cash flow, after deducting capital expenditure, yielded free cash flow. The resulting free cash flow margin was lower than both the preceding quarter and the same quarter last year.
- Compared to the immediate prior quarter, revenue was slightly lower while operating cash flow and free cash flow were significantly lower, leading to a weakened margin. Versus the year-ago quarter, revenue was higher but operating cash flow and free cash flow were lower, also resulting in a weaker margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.8B
Trailing twelve-month free cash flow.
Quarter free cash flow
$423.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$465.0M
Cash generated by operations before capital spending.
CapEx
$42.0M
Capital spending and related asset purchases.
FCF margin
16.2%
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 |
|---|---|---|---|---|---|
| 2023-03-31 | $2.3B | $330.0M | $44.0M | $286.0M | 12.5% |
| 2023-06-30 | $2.7B | $464.0M | $30.0M | $434.0M | 16.3% |
| 2023-09-30 | $2.7B | $687.0M | $35.0M | $652.0M | 24.4% |
| 2023-12-31 | $2.6B | $465.0M | $42.0M | $423.0M | 16.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 287.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.6% | 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.
Lower Operating Cash Flow
Operating cash flow was lower than both the prior quarter and the year-ago quarter, despite revenue being higher than a year ago. This was the primary factor behind the decline in free cash flow.
The reduction in operating cash flow pressured free cash flow and margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow, after deducting capital expenditure, yielded free cash flow. The resulting free cash flow margin was lower than both the preceding quarter and the same quarter last year.
Compared to the immediate prior quarter, revenue was slightly lower while operating cash flow and free cash flow were significantly lower, leading to a weakened margin. Versus the year-ago quarter, revenue was higher but operating cash flow and free cash flow were lower, also resulting in a weaker margin.
Monitor the trend in operating cash flow relative to revenue in upcoming quarters, as it is the main driver of free cash flow.