Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow improved year over year but declined sequentially. Operating cash flow remained relatively stable compared to the prior quarter while capital expenditure increased substantially.
- Free cash flow margin improved from the same quarter last year but weakened from the previous quarter. The conversion of revenue into operating cash flow was higher year over year, but higher capital spending reduced free cash flow.
- Compared to the prior quarter, revenue and free cash flow were lower, while capital expenditure was higher. Compared to the same quarter last year, revenue, operating cash flow, and free cash flow were all higher, with a higher free cash flow margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$486.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
$181.1M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$306.3M
Cash generated by operations before capital spending.
CapEx
$125.2M
Capital spending and related asset purchases.
FCF margin
15.7%
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 | $1.0B | -$78.8M | $35.4M | -$114.2M | -10.9% |
| 2023-06-30 | $1.4B | $195.5M | $49.9M | $145.6M | 10.3% |
| 2023-09-30 | $1.4B | $313.2M | $39.7M | $273.5M | 20.0% |
| 2023-12-31 | $1.2B | $306.3M | $125.2M | $181.1M | 15.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 124.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 10.8% | 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.
Capital Expenditure Increase
Capital expenditure was substantially higher than both the preceding quarter and the year-ago quarter, reducing free cash flow despite stable operating cash flow.
The higher capital spending caused free cash flow margin to decline sequentially.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Free cash flow margin improved from the same quarter last year but weakened from the previous quarter. The conversion of revenue into operating cash flow was higher year over year, but higher capital spending reduced free cash flow.
Compared to the prior quarter, revenue and free cash flow were lower, while capital expenditure was higher. Compared to the same quarter last year, revenue, operating cash flow, and free cash flow were all higher, with a higher free cash flow margin.
Monitor capital expenditure levels given the significant increase from both prior periods.