Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue and operating cash flow both increased from the prior quarter, while free cash flow rose despite a slight reduction in capital expenditure. Compared to the same quarter last year, revenue was higher but free cash flow was lower due to a larger capital expenditure and a slightly lower operating cash flow.
- Operating cash flow as a share of revenue improved from the prior quarter, supporting a higher free cash flow margin. The conversion from operating cash flow to free cash flow was tempered by capital expenditure, which was higher than a year ago but lower than the prior quarter.
- Compared to the prior quarter, revenue, operating cash flow, free cash flow, and free cash flow margin all improved. Versus the same quarter last year, revenue was higher, but free cash flow and free cash flow margin were lower, while operating cash flow was slightly lower and capital expenditure was higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.6B
Trailing twelve-month free cash flow.
Quarter free cash flow
$652.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$789.0M
Cash generated by operations before capital spending.
CapEx
$137.0M
Capital spending and related asset purchases.
FCF margin
12.2%
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 | $4.5B | $350.0M | $71.0M | $279.0M | 6.2% |
| 2023-06-30 | $4.7B | $414.0M | $93.0M | $321.0M | 6.8% |
| 2023-09-29 | $4.9B | $543.0M | $148.0M | $395.0M | 8.0% |
| 2023-12-29 | $5.3B | $789.0M | $137.0M | $652.0M | 12.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 412.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.6% | 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.
Revenue growth supporting cash generation
Revenue increased from both the prior quarter and the same quarter last year, and operating cash flow rose sequentially. This combination drove a higher free cash flow margin compared to the prior quarter.
The sequential improvement in free cash flow was primarily supported by higher revenue and operating cash flow.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a share of revenue improved from the prior quarter, supporting a higher free cash flow margin. The conversion from operating cash flow to free cash flow was tempered by capital expenditure, which was higher than a year ago but lower than the prior quarter.
Compared to the prior quarter, revenue, operating cash flow, free cash flow, and free cash flow margin all improved. Versus the same quarter last year, revenue was higher, but free cash flow and free cash flow margin were lower, while operating cash flow was slightly lower and capital expenditure was higher.
Monitor the trend in capital expenditure relative to operating cash flow, as a higher ratio compared to the prior year reduced free cash flow conversion.