Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow margin improved sharply versus the prior quarter and the year-ago quarter, driven by operating cash flow that was higher than revenue growth. Revenue was lower sequentially but operating cash flow more than compensated, resulting in a strengthened cash conversion profile.
- Revenue was lower compared to both the prior quarter and the year-ago quarter, yet operating cash flow was higher in both comparisons, leading to a materially higher free cash flow and free cash flow margin. Capital expenditure was slightly higher than the prior quarter but moderately higher than the year-ago quarter, but the increase in operating cash flow more than offset this.
- Compared to the immediately preceding quarter, revenue was lower, operating cash flow was higher, capital expenditure was higher, and free cash flow and free cash flow margin were both substantially higher. Versus the same quarter one year earlier, revenue was lower, operating cash flow was higher, capital expenditure was higher, and free cash flow and free cash flow margin were both higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.8B
Trailing twelve-month free cash flow.
Quarter free cash flow
$998.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.2B
Cash generated by operations before capital spending.
CapEx
$217.0M
Capital spending and related asset purchases.
FCF margin
59.2%
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 | $5.2B | $613.0M | $201.0M | $412.0M | 7.9% |
| 2023-06-30 | $5.1B | $787.0M | $188.0M | $599.0M | 11.7% |
| 2023-09-30 | $5.1B | $927.0M | $160.0M | $767.0M | 14.9% |
| 2023-12-31 | $1.7B | $1.2B | $217.0M | $998.0M | 59.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 196.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 12.9% | 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.
Operating cash flow strength
Operating cash flow rose significantly from both the prior quarter and the year-ago quarter, despite a decline in revenue. This was the primary factor behind the improvement in free cash flow and free cash flow margin.
The cash conversion efficiency, as measured by free cash flow margin, strengthened considerably this quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was lower compared to both the prior quarter and the year-ago quarter, yet operating cash flow was higher in both comparisons, leading to a materially higher free cash flow and free cash flow margin. Capital expenditure was slightly higher than the prior quarter but moderately higher than the year-ago quarter, but the increase in operating cash flow more than offset this.
Compared to the immediately preceding quarter, revenue was lower, operating cash flow was higher, capital expenditure was higher, and free cash flow and free cash flow margin were both substantially higher. Versus the same quarter one year earlier, revenue was lower, operating cash flow was higher, capital expenditure was higher, and free cash flow and free cash flow margin were both higher.
Monitor whether operating cash flow can remain at the elevated level relative to revenue in subsequent quarters, given the large sequential and year-over-year improvement.