Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow improved sequentially driven by higher operating cash flow and lower capital expenditure. However, compared to the same quarter last year, free cash flow and margin were lower despite slightly higher revenue.
- Revenue was stable sequentially and slightly higher year over year. Operating cash flow increased from the prior quarter but decreased from the year-ago period. Capital expenditure was lower in both comparisons. As a result, free cash flow and free cash flow margin improved sequentially but weakened compared to the prior year.
- Compared to the immediately preceding quarter, free cash flow and margin improved as operating cash flow rose and capital expenditure fell. Compared to the same quarter one year earlier, free cash flow and margin declined even though revenue was slightly higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.3B
Trailing twelve-month free cash flow.
Quarter free cash flow
$437.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$583.0M
Cash generated by operations before capital spending.
CapEx
$146.0M
Capital spending and related asset purchases.
FCF margin
11.7%
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 | $3.7B | $560.0M | $171.0M | $389.0M | 10.4% |
| 2023-03-31 | $3.7B | $417.0M | $164.0M | $253.0M | 6.9% |
| 2023-06-30 | $3.7B | $402.0M | $160.0M | $242.0M | 6.5% |
| 2023-09-30 | $3.7B | $583.0M | $146.0M | $437.0M | 11.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 144.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.9% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$12.4B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Sequential operating cash flow improvement
Operating cash flow increased from the previous quarter, driving a higher free cash flow margin. This improvement occurred with stable revenue and lower capital expenditure.
The sequential improvement in cash conversion helped free cash flow recover from the prior quarter's level, though it remained below the year-ago level.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was stable sequentially and slightly higher year over year. Operating cash flow increased from the prior quarter but decreased from the year-ago period. Capital expenditure was lower in both comparisons. As a result, free cash flow and free cash flow margin improved sequentially but weakened compared to the prior year.
Compared to the immediately preceding quarter, free cash flow and margin improved as operating cash flow rose and capital expenditure fell. Compared to the same quarter one year earlier, free cash flow and margin declined even though revenue was slightly higher.
Monitor the trend in operating cash flow, which declined significantly from the prior year despite stable revenue.