Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow increased sharply from the prior quarter and improved significantly from the same quarter last year. The improvement was driven by stronger operating cash flow combined with a slight rise in capital expenditure.
- Revenue edged lower quarter over quarter and was flat compared to the same quarter last year, while operating cash flow rose substantially. As a result, free cash flow margin widened to a higher level than both prior periods, indicating improved cash conversion efficiency from operations.
- Compared to the immediately preceding quarter, revenue was slightly lower, operating cash flow and free cash flow were both higher, and the free cash flow margin strengthened. Compared to the same quarter one year earlier, revenue was stable, operating cash flow and free cash flow were markedly higher, and the margin improved substantially.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$952.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
$547.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$660.0M
Cash generated by operations before capital spending.
CapEx
$113.0M
Capital spending and related asset purchases.
FCF margin
20.2%
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 | $3.0B | $127.0M | $175.0M | -$48.0M | -1.6% |
| 2023-06-30 | $2.9B | $248.0M | $115.0M | $133.0M | 4.5% |
| 2023-09-30 | $2.8B | $420.0M | $100.0M | $320.0M | 11.3% |
| 2023-12-31 | $2.7B | $660.0M | $113.0M | $547.0M | 20.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -20.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 4.2% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$9.3B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Strong operating cash flow uplift
Operating cash flow rose sharply versus both the prior quarter and the same quarter last year. This was the primary factor behind the higher free cash flow and the expansion of the free cash flow margin.
The substantial increase in operating cash flow drove free cash flow to a higher level even as capital expenditure rose slightly.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue edged lower quarter over quarter and was flat compared to the same quarter last year, while operating cash flow rose substantially. As a result, free cash flow margin widened to a higher level than both prior periods, indicating improved cash conversion efficiency from operations.
Compared to the immediately preceding quarter, revenue was slightly lower, operating cash flow and free cash flow were both higher, and the free cash flow margin strengthened. Compared to the same quarter one year earlier, revenue was stable, operating cash flow and free cash flow were markedly higher, and the margin improved substantially.
Monitor the level of capital expenditure relative to operating cash flow, as a modest increase in capex accompanied a much larger rise in operating cash flow this quarter.