Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow and margin improved significantly year over year, despite lower revenue. Sequentially, free cash flow rose as operating cash flow increased at a faster pace than capital expenditure.
- Revenue was lower than the prior year, but operating cash flow was substantially higher, leading to a much improved free cash flow. Capital expenditure increased moderately compared with both periods, but the conversion from revenue to free cash flow strengthened, as reflected in a higher margin.
- Compared with the immediately preceding quarter, revenue, operating cash flow, and free cash flow were all higher, while capital expenditure also rose. Versus the same quarter one year earlier, revenue was lower but operating cash flow and free cash flow were higher, and the margin improved markedly.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.6B
Trailing twelve-month free cash flow.
Quarter free cash flow
$522.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$920.0M
Cash generated by operations before capital spending.
CapEx
$398.0M
Capital spending and related asset purchases.
FCF margin
12.5%
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 | $5.0B | $1.0B | $316.0M | $724.0M | 14.4% |
| 2023-03-31 | $4.5B | $1.2B | $289.0M | $932.0M | 20.6% |
| 2023-06-30 | $3.7B | $772.0M | $305.0M | $467.0M | 12.5% |
| 2023-09-30 | $4.2B | $920.0M | $398.0M | $522.0M | 12.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 115.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 9.5% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$21.7B | 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
Operating cash flow was the primary observable driver, improving both sequentially and year over year even as revenue declined from the prior year. This supported a higher free cash flow and a wider margin.
Higher operating cash flow directly strengthened free cash flow and cash conversion efficiency in the quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was lower than the prior year, but operating cash flow was substantially higher, leading to a much improved free cash flow. Capital expenditure increased moderately compared with both periods, but the conversion from revenue to free cash flow strengthened, as reflected in a higher margin.
Compared with the immediately preceding quarter, revenue, operating cash flow, and free cash flow were all higher, while capital expenditure also rose. Versus the same quarter one year earlier, revenue was lower but operating cash flow and free cash flow were higher, and the margin improved markedly.
Monitor the impact of the recently completed acquisition on future capital expenditure and free cash flow trends.