Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue, operating cash flow, and free cash flow all declined compared to both the prior quarter and the same quarter last year. The free cash flow margin weakened, reflecting a larger proportional drop in operating cash flow relative to revenue.
- Cash conversion weakened as the free cash flow margin fell from the prior quarter and from a year earlier, driven by a steeper decline in operating cash flow than in revenue.
- Compared to the immediately preceding quarter, revenue was lower and operating cash flow, free cash flow, and free cash flow margin all decreased. Versus the same quarter one year earlier, all metrics were also lower, with the margin showing the largest relative decline.
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
$489.4M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$495.7M
Cash generated by operations before capital spending.
CapEx
$6.3M
Capital spending and related asset purchases.
FCF margin
20.1%
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 |
|---|---|---|---|---|---|
| 2023-03-31 | $2.2B | $315.5M | $2.7M | $312.8M | 14.4% |
| 2023-06-30 | $2.3B | $28.7M | $8.7M | $19.9M | 0.9% |
| 2023-09-30 | $2.6B | $658.1M | $7.1M | $651.0M | 25.3% |
| 2023-12-31 | $2.4B | $495.7M | $6.3M | $489.4M | 20.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 119.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.3% | 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.
Weakening cash generation efficiency
The decline in free cash flow margin was the most notable change, as operating cash flow fell at a faster rate than revenue. This indicates a reduced ability to convert revenue into free cash flow.
If the trend continues, future free cash flow may remain under pressure relative to revenue levels.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Cash conversion weakened as the free cash flow margin fell from the prior quarter and from a year earlier, driven by a steeper decline in operating cash flow than in revenue.
Compared to the immediately preceding quarter, revenue was lower and operating cash flow, free cash flow, and free cash flow margin all decreased. Versus the same quarter one year earlier, all metrics were also lower, with the margin showing the largest relative decline.
Monitor the trajectory of free cash flow margin, as it has declined for two consecutive comparative periods.