Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow weakened sequentially and year-over-year as operating cash flow declined more than capital expenditure increased. Revenue was stable versus the prior quarter but lower than a year ago, while margins narrowed.
- The free cash flow margin contracted sharply from both the prior quarter and the year-ago period, driven by lower operating cash flow generation relative to revenue. Capital expenditure rose from both comparison periods, further reducing cash conversion.
- Compared to the prior quarter, revenue was slightly higher but operating cash flow dropped significantly, resulting in a lower free cash flow. Versus the same quarter last year, revenue was lower, operating cash flow was lower, and free cash flow was weaker.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.4B
Trailing twelve-month free cash flow.
Quarter free cash flow
$235.7M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$647.4M
Cash generated by operations before capital spending.
CapEx
$411.7M
Capital spending and related asset purchases.
FCF margin
6.6%
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 | $4.5B | $955.7M | $340.5M | $615.2M | 13.7% |
| 2023-03-31 | $3.6B | $149.0M | $321.5M | -$172.5M | -4.8% |
| 2023-06-30 | $3.4B | $1.1B | $310.3M | $762.4M | 22.5% |
| 2023-09-30 | $3.5B | $647.4M | $411.7M | $235.7M | 6.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -5611.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 11.6% | 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.
Operating Cash Flow Decline
The most observable driver was a substantial decline in operating cash flow despite a slight revenue increase from the prior quarter. This weakened free cash flow and margins.
Lower operating cash flow was the primary factor behind the decline in free cash flow and cash conversion.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
The free cash flow margin contracted sharply from both the prior quarter and the year-ago period, driven by lower operating cash flow generation relative to revenue. Capital expenditure rose from both comparison periods, further reducing cash conversion.
Compared to the prior quarter, revenue was slightly higher but operating cash flow dropped significantly, resulting in a lower free cash flow. Versus the same quarter last year, revenue was lower, operating cash flow was lower, and free cash flow was weaker.
Monitor the trend of capital expenditure, which increased from both the prior quarter and the year-ago period.