Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow margin improved from the prior quarter and the same quarter last year, even though revenue was lower. Operating cash flow increased sequentially but remained below the year-ago level, while capital expenditure rose from the prior quarter.
- Operating cash flow as a proportion of revenue was higher than both the prior quarter and the year-ago quarter, driving a stronger free cash flow margin despite lower absolute revenue. Capital expenditure consumed a larger share of operating cash flow sequentially, partly offsetting the cash conversion improvement.
- Compared with the prior quarter, revenue was lower, operating cash flow was higher, capital expenditure was higher, and free cash flow was lower, while free cash flow margin improved. Versus the same quarter a year ago, revenue, operating cash flow, capital expenditure, and free cash flow were all lower, but free cash flow margin was higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$692.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
$187.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$492.0M
Cash generated by operations before capital spending.
CapEx
$305.0M
Capital spending and related asset purchases.
FCF margin
10.9%
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 | $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% |
| 2023-12-31 | $1.7B | $492.0M | $305.0M | $187.0M | 10.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -65.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 17.8% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$4.5B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Free Cash Flow Margin Expansion
The free cash flow margin rose to a level above both the prior quarter and the same quarter a year ago, driven by a higher operating cash flow conversion rate relative to revenue. This improvement occurred even as revenue declined significantly.
The higher margin indicates that the company generated more free cash flow per dollar of revenue compared with recent periods, despite lower absolute revenue.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a proportion of revenue was higher than both the prior quarter and the year-ago quarter, driving a stronger free cash flow margin despite lower absolute revenue. Capital expenditure consumed a larger share of operating cash flow sequentially, partly offsetting the cash conversion improvement.
Compared with the prior quarter, revenue was lower, operating cash flow was higher, capital expenditure was higher, and free cash flow was lower, while free cash flow margin improved. Versus the same quarter a year ago, revenue, operating cash flow, capital expenditure, and free cash flow were all lower, but free cash flow margin was higher.
Monitor the trend in capital expenditure relative to operating cash flow, as a higher spending rate reduced the free cash flow generated from operations.