Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was slightly higher than the prior quarter but lower than the same quarter last year. Free cash flow and free cash flow margin improved significantly compared to both the prior quarter and the year-ago quarter.
- Operating cash flow was substantially higher than both the prior quarter and the year-ago quarter, while capital expenditure was slightly lower than the prior quarter but higher than the year-ago quarter. The combination drove free cash flow and free cash flow margin to their highest levels among the three periods.
- Compared to the prior quarter, revenue was slightly higher, operating cash flow was substantially higher, capital expenditure was slightly lower, and free cash flow and free cash flow margin were markedly higher. Compared to the same quarter last year, revenue was lower, operating cash flow was substantially higher, capital expenditure was higher, and free cash flow and free cash flow margin were markedly higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$4.2B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.7B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$2.3B
Cash generated by operations before capital spending.
CapEx
$628.0M
Capital spending and related asset purchases.
FCF margin
47.5%
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 | $1.3B | $507.0M | $826.0M | 24.0% |
| 2023-06-30 | $3.1B | $1.6B | $535.0M | $1.0B | 32.7% |
| 2023-09-30 | $3.5B | $1.3B | $647.0M | $639.0M | 18.1% |
| 2023-12-31 | $3.6B | $2.3B | $628.0M | $1.7B | 47.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 285.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 17.6% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$32.0B | 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 was the strongest observable driver, rising substantially from both the prior quarter and the year-ago quarter. This increase was the primary factor behind the improvement in free cash flow and free cash flow margin.
The higher operating cash flow more than offset the increase in capital expenditure, resulting in a materially higher free cash flow and free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow was substantially higher than both the prior quarter and the year-ago quarter, while capital expenditure was slightly lower than the prior quarter but higher than the year-ago quarter. The combination drove free cash flow and free cash flow margin to their highest levels among the three periods.
Compared to the prior quarter, revenue was slightly higher, operating cash flow was substantially higher, capital expenditure was slightly lower, and free cash flow and free cash flow margin were markedly higher. Compared to the same quarter last year, revenue was lower, operating cash flow was substantially higher, capital expenditure was higher, and free cash flow and free cash flow margin were markedly higher.
Monitor whether the elevated operating cash flow level relative to revenue persists in future quarters.