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 and its margin improved significantly compared to both the prior quarter and the same quarter last year. This was driven by a larger increase in operating cash flow relative to revenue growth, with capital expenditure remaining stable.
- Revenue was higher in the current quarter versus both comparison periods. Operating cash flow grew more than revenue, resulting in an improved free cash flow margin. Capital expenditure was relatively stable across all three quarters.
- Compared to the immediately preceding quarter, free cash flow and its margin were higher. Compared to the same quarter one year earlier, free cash flow and its margin were also higher and showed a notable improvement.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$5.7B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.9B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$2.0B
Cash generated by operations before capital spending.
CapEx
$103.9M
Capital spending and related asset purchases.
FCF margin
22.1%
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 | $7.9B | $443.9M | $111.6M | $332.3M | 4.2% |
| 2023-03-31 | $8.2B | $2.2B | $62.0M | $2.1B | 25.9% |
| 2023-06-30 | $8.2B | $1.4B | $101.0M | $1.3B | 16.4% |
| 2023-09-30 | $8.5B | $2.0B | $103.9M | $1.9B | 22.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 112.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.2% | 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.
Strong operating cash flow conversion
Operating cash flow increased from both the prior quarter and the year-ago quarter, and this increase outpaced the growth in revenue, lifting free cash flow and its margin.
Higher operating cash flow was the most observable driver of the improved free cash flow position this quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher in the current quarter versus both comparison periods. Operating cash flow grew more than revenue, resulting in an improved free cash flow margin. Capital expenditure was relatively stable across all three quarters.
Compared to the immediately preceding quarter, free cash flow and its margin were higher. Compared to the same quarter one year earlier, free cash flow and its margin were also higher and showed a notable improvement.
Monitor any changes in operating cash flow relative to revenue, as this was the primary factor behind the quarter's free cash flow improvement.