Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue remained stable sequentially but operating cash flow and free cash flow declined, resulting in a weaker free cash flow margin. Compared to the same quarter last year, revenue was higher while cash generation was lower, with margins deteriorating.
- The conversion of revenue into operating cash flow weakened both sequentially and year-over-year, as operating cash flow declined even as revenue held steady or increased. Capital expenditure decreased, but not enough to offset the drop in operating cash flow, leading to a lower free cash flow margin.
- Sequentially, free cash flow and its margin weakened notably due to lower operating cash flow on flat revenue. Year-over-year, free cash flow also declined despite higher revenue, with margin falling from the prior year period.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$3.2B
Trailing twelve-month free cash flow.
Quarter free cash flow
$541.8M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$616.2M
Cash generated by operations before capital spending.
CapEx
$74.4M
Capital spending and related asset purchases.
FCF margin
24.0%
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 | $2.2B | $1.3B | $141.3M | $1.1B | 52.4% |
| 2023-03-31 | $2.2B | $709.5M | $112.7M | $596.8M | 26.7% |
| 2023-06-30 | $2.3B | $993.2M | $111.1M | $882.1M | 38.5% |
| 2023-09-30 | $2.3B | $616.2M | $74.4M | $541.8M | 24.0% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 81.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.3% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$5.8B | 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 Decline
The primary driver of the quarter's free cash flow change was a sharp reduction in operating cash flow, which fell sequentially and year-over-year despite stable or higher revenue. This indicates lower cash conversion efficiency.
The lower operating cash flow compressed free cash flow margins and reduced cash generation relative to revenue.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
The conversion of revenue into operating cash flow weakened both sequentially and year-over-year, as operating cash flow declined even as revenue held steady or increased. Capital expenditure decreased, but not enough to offset the drop in operating cash flow, leading to a lower free cash flow margin.
Sequentially, free cash flow and its margin weakened notably due to lower operating cash flow on flat revenue. Year-over-year, free cash flow also declined despite higher revenue, with margin falling from the prior year period.
Monitor the trajectory of operating cash flow as the company manages through a period of weaker business conditions cited in the filing.