Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
In the third quarter, free cash flow improved year over year despite lower revenue, supported by higher operating cash flow and reduced capital spending. However, compared to the prior quarter, free cash flow and margin slightly weakened as revenue and operating cash flow declined.
- Revenue decreased from both the prior quarter and the year-ago quarter. Operating cash flow increased year over year but fell sequentially. Capital expenditure was lower in both comparisons, helping free cash flow remain above the year-ago level. The free cash flow margin improved from a year earlier but edged down from the prior quarter.
- Compared with the year-ago quarter, revenue was lower while operating cash flow, free cash flow, and margin were higher. Sequentially, all core metrics—revenue, operating cash flow, free cash flow, and margin—were lower. The overall performance showed a mixed year-over-year picture and a clear sequential weakening.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$944.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
$240.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$468.0M
Cash generated by operations before capital spending.
CapEx
$228.0M
Capital spending and related asset purchases.
FCF margin
5.2%
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 | $5.1B | $761.0M | $322.0M | $439.0M | 8.6% |
| 2023-03-31 | $5.0B | $345.0M | $341.0M | $4.0M | 0.1% |
| 2023-06-30 | $4.7B | $528.0M | $267.0M | $261.0M | 5.6% |
| 2023-09-30 | $4.6B | $468.0M | $228.0M | $240.0M | 5.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 145.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 4.9% | 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 improvement in operating cash flow
Operating cash flow increased year over year, providing the main lift to free cash flow despite a drop in revenue. This improvement partly offset the negative impact of lower sales.
The year-over-year improvement in operating cash flow was the strongest positive driver for free cash flow this quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue decreased from both the prior quarter and the year-ago quarter. Operating cash flow increased year over year but fell sequentially. Capital expenditure was lower in both comparisons, helping free cash flow remain above the year-ago level. The free cash flow margin improved from a year earlier but edged down from the prior quarter.
Compared with the year-ago quarter, revenue was lower while operating cash flow, free cash flow, and margin were higher. Sequentially, all core metrics—revenue, operating cash flow, free cash flow, and margin—were lower. The overall performance showed a mixed year-over-year picture and a clear sequential weakening.
Monitor the trend in operating cash flow generation, as it is the primary source of free cash flow and has shown mixed year-over-year and sequential changes.