Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow margin weakened this quarter, with lower operating cash flow and higher capital expenditure compared to both the prior quarter and the same quarter a year ago. Management stated that financial condition and liquidity remain strong, and they continue to focus on productivity initiatives and growth opportunities.
- Revenue was higher than both comparable periods, but operating cash flow was lower, resulting in a lower free cash flow. Capital expenditure was also higher, further reducing free cash flow and margin.
- Compared to the preceding quarter, operating cash flow was lower and capital expenditure was higher, leading to a weakened free cash flow margin. The same pattern held when compared to the same quarter a year ago, with both operating cash flow and free cash flow margin lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$904.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
$143.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$297.0M
Cash generated by operations before capital spending.
CapEx
$154.0M
Capital spending and related asset purchases.
FCF margin
3.7%
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 |
|---|---|---|---|---|---|
| 2023-03-31 | $3.4B | $71.0M | $62.0M | $9.0M | 0.3% |
| 2023-06-30 | $3.8B | $381.0M | $87.0M | $294.0M | 7.8% |
| 2023-09-30 | $3.8B | $580.0M | $122.0M | $458.0M | 12.0% |
| 2023-12-31 | $3.9B | $297.0M | $154.0M | $143.0M | 3.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 20.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 4.0% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$12.9B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Operating cash flow decline
Operating cash flow decreased compared to both the prior quarter and the year-ago quarter, while revenue improved. This was the primary factor behind the lower free cash flow margin.
The decline in operating cash flow was the primary driver of the weakened free cash flow generation.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher than both comparable periods, but operating cash flow was lower, resulting in a lower free cash flow. Capital expenditure was also higher, further reducing free cash flow and margin.
Compared to the preceding quarter, operating cash flow was lower and capital expenditure was higher, leading to a weakened free cash flow margin. The same pattern held when compared to the same quarter a year ago, with both operating cash flow and free cash flow margin lower.
Monitor the trend of operating cash flow relative to revenue, as it was lower this quarter compared to both prior periods.