Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow improved significantly compared to the same quarter one year earlier, driven by higher operating cash flow. The margin strengthened versus the prior year but weakened relative to the immediately preceding quarter.
- Revenue increased from both the prior quarter and the year-ago quarter. Operating cash flow was higher than a year earlier but lower than the previous quarter, while capital expenditure decreased compared to both periods. Free cash flow and its margin followed a similar pattern, reflecting a mixed cash conversion trend.
- Compared to the immediately preceding quarter, free cash flow and its margin were lower, despite higher revenue and lower capital expenditure, due to a decrease in operating cash flow. Versus the same quarter one year earlier, free cash flow and its margin were substantially higher, driven by a large increase in operating cash flow and a reduction in capital expenditure.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$6.9B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.6B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.7B
Cash generated by operations before capital spending.
CapEx
$81.6M
Capital spending and related asset purchases.
FCF margin
17.9%
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 | $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% |
| 2023-12-31 | $8.8B | $1.7B | $81.6M | $1.6B | 17.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 168.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.9% | 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 Growth
Operating cash flow was substantially higher than the same quarter one year earlier, providing the primary lift to free cash flow. This improvement occurred alongside higher revenue and lower capital expenditure.
The year-over-year increase in operating cash flow was the strongest observable driver of free cash flow improvement.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased from both the prior quarter and the year-ago quarter. Operating cash flow was higher than a year earlier but lower than the previous quarter, while capital expenditure decreased compared to both periods. Free cash flow and its margin followed a similar pattern, reflecting a mixed cash conversion trend.
Compared to the immediately preceding quarter, free cash flow and its margin were lower, despite higher revenue and lower capital expenditure, due to a decrease in operating cash flow. Versus the same quarter one year earlier, free cash flow and its margin were substantially higher, driven by a large increase in operating cash flow and a reduction in capital expenditure.
Monitor the trend in operating cash flow relative to revenue, as its decline from the prior quarter affected free cash flow conversion.