Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Operating cash flow converted strongly into free cash flow, with capital expenditure remaining low relative to revenue. Both revenue and cash flow measures were higher than the prior quarter and the same quarter last year.
- Revenue was higher than both the prior quarter and the year-ago quarter. Operating cash flow exceeded capital expenditure by a wide margin, resulting in free cash flow nearly equal to operating cash flow. The free cash flow margin was elevated compared to prior periods.
- Compared to the prior quarter, revenue, operating cash flow, and free cash flow all improved, while capital expenditure was lower. Compared to the same quarter last year, all metrics were higher except capital expenditure, which was slightly higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.3B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.8B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.8B
Cash generated by operations before capital spending.
CapEx
$14.2M
Capital spending and related asset purchases.
FCF margin
44.0%
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 | $3.4B | -$522.1M | $23.1M | -$545.2M | -15.8% |
| 2023-06-30 | $3.6B | -$262.5M | $16.9M | -$279.4M | -7.7% |
| 2023-09-30 | $3.6B | $405.5M | $24.2M | $381.3M | 10.7% |
| 2023-12-31 | $4.1B | $1.8B | $14.2M | $1.8B | 44.0% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 419.7% | 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.
Operating Cash Flow Improvement
Operating cash flow was significantly higher than both the prior quarter and the year-ago quarter, driving the strong free cash flow.
The higher operating cash flow enabled the company to generate substantial free cash flow despite stable capital expenditure.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher than both the prior quarter and the year-ago quarter. Operating cash flow exceeded capital expenditure by a wide margin, resulting in free cash flow nearly equal to operating cash flow. The free cash flow margin was elevated compared to prior periods.
Compared to the prior quarter, revenue, operating cash flow, and free cash flow all improved, while capital expenditure was lower. Compared to the same quarter last year, all metrics were higher except capital expenditure, which was slightly higher.
The company's credit facility and commercial paper programs, as they provide additional liquidity sources beyond operating cash flow, as noted in the filing.