Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
In the current quarter, Mastercard generated a strong free cash flow margin driven by solid operating cash flow and modest capital expenditure. Revenue and operating cash flow increased sequentially, but both metrics declined compared to the prior-year period.
- Operating cash flow represented nearly half of revenue, and after minimal capital expenditure, the free cash flow margin remained robust. The conversion from revenue to free cash flow was efficient.
- Compared to the preceding quarter, revenue, operating cash flow, and free cash flow all improved, with the free cash flow margin expanding. Versus the same quarter last year, revenue was higher but operating cash flow and free cash flow were lower, and the margin weakened.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$10.5B
Trailing twelve-month free cash flow.
Quarter free cash flow
$3.1B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$3.2B
Cash generated by operations before capital spending.
CapEx
$104.0M
Capital spending and related asset purchases.
FCF margin
47.9%
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 |
|---|---|---|---|---|---|
| 2022-12-31 | $5.8B | $3.1B | $130.0M | $3.0B | 51.1% |
| 2023-03-31 | $5.7B | $1.9B | $110.0M | $1.8B | 31.5% |
| 2023-06-30 | $6.3B | $2.7B | $80.0M | $2.6B | 41.8% |
| 2023-09-30 | $6.5B | $3.2B | $104.0M | $3.1B | 47.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 97.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.6% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$8.7B | 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 Trend
Operating cash flow rose sequentially but declined compared to the same period a year ago, leading to a lower free cash flow year-over-year. This metric is the primary driver of free cash flow.
A sustained decline in operating cash flow would directly reduce free cash flow and margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow represented nearly half of revenue, and after minimal capital expenditure, the free cash flow margin remained robust. The conversion from revenue to free cash flow was efficient.
Compared to the preceding quarter, revenue, operating cash flow, and free cash flow all improved, with the free cash flow margin expanding. Versus the same quarter last year, revenue was higher but operating cash flow and free cash flow were lower, and the margin weakened.
Monitor the year-over-year decline in operating cash flow given its direct impact on free cash flow generation.