Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
In the current quarter, free cash flow margin weakened slightly from the prior quarter as revenue growth outpaced operating cash flow, while free cash flow remained stable. Compared to the same quarter last year, operating cash flow and free cash flow improved.
- Revenue increased relative to the previous quarter, while operating cash flow remained unchanged. Capital expenditure rose slightly, resulting in free cash flow that was flat and a free cash flow margin that declined.
- Sequentially, the free cash flow margin declined from the prior quarter, as revenue grew but operating cash flow did not. Year-over-year, operating cash flow and free cash flow were higher, and capital expenditure increased.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$3.8B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.7B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.8B
Cash generated by operations before capital spending.
CapEx
$120.0M
Capital spending and related asset purchases.
FCF margin
29.9%
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 |
|---|---|---|---|---|---|
| 2023-03-31 | n/a | -$819.0M | $84.0M | -$903.0M | n/a |
| 2023-06-30 | $5.9B | $1.5B | $101.0M | $1.4B | 23.5% |
| 2023-09-30 | $5.4B | $1.8B | $111.0M | $1.7B | 31.6% |
| 2023-12-31 | $5.6B | $1.8B | $120.0M | $1.7B | 29.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 220.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.2% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$10.1B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Free cash flow margin compression
Revenue increased compared to the prior quarter, but operating cash flow remained flat, causing the free cash flow margin to decrease.
This resulted in a lower free cash flow margin for the quarter, indicating that incremental revenue did not generate additional operating cash flow.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased relative to the previous quarter, while operating cash flow remained unchanged. Capital expenditure rose slightly, resulting in free cash flow that was flat and a free cash flow margin that declined.
Sequentially, the free cash flow margin declined from the prior quarter, as revenue grew but operating cash flow did not. Year-over-year, operating cash flow and free cash flow were higher, and capital expenditure increased.
Monitor the trend in free cash flow margin, as revenue growth may not be fully translating into operating cash flow.