Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
In the fourth quarter, revenue was lower than the preceding quarter but higher than the same quarter a year earlier. Free cash flow margin improved compared to the prior year, though it weakened sequentially.
- Revenue and operating cash flow were lower than the previous quarter, while capital expenditure was higher, resulting in a lower free cash flow and margin. Compared to the same quarter last year, revenue, operating cash flow, and free cash flow were all higher, with an improved margin.
- Sequentially, revenue, operating cash flow, and free cash flow declined, and the free cash flow margin weakened. Year-over-year, all metrics improved, with higher revenue, operating cash flow, free cash flow, and margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.5B
Trailing twelve-month free cash flow.
Quarter free cash flow
$323.1M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$434.3M
Cash generated by operations before capital spending.
CapEx
$111.2M
Capital spending and related asset purchases.
FCF margin
18.7%
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 | $1.7B | $424.5M | $40.1M | $384.4M | 22.6% |
| 2023-06-30 | $1.9B | $338.7M | $42.3M | $296.4M | 16.0% |
| 2023-09-30 | $1.9B | $520.3M | $27.8M | $492.5M | 26.5% |
| 2023-12-31 | $1.7B | $434.3M | $111.2M | $323.1M | 18.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 88.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 6.4% | Lower capital intensity usually supports FCF margin. |
| Net cash | $2.3B | 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 in the current quarter was higher than both the preceding quarter and the same quarter a year ago, which reduced free cash flow compared to what it would have been otherwise.
This higher capital expenditure was a primary factor in the sequential decline in free cash flow and margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue and operating cash flow were lower than the previous quarter, while capital expenditure was higher, resulting in a lower free cash flow and margin. Compared to the same quarter last year, revenue, operating cash flow, and free cash flow were all higher, with an improved margin.
Sequentially, revenue, operating cash flow, and free cash flow declined, and the free cash flow margin weakened. Year-over-year, all metrics improved, with higher revenue, operating cash flow, free cash flow, and margin.
The substantial increase in capital expenditure relative to both prior periods warrants monitoring.