Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow weakened despite higher revenue, as operating cash flow declined and capital expenditure rose. The free cash flow margin contracted compared to both the prior quarter and the same quarter last year.
- Revenue increased, but the conversion into operating cash flow was lower, and the proportion of capital expenditure relative to revenue was higher. This resulted in a lower free cash flow margin.
- Compared to the immediately preceding quarter, operating cash flow and free cash flow were lower, while capital expenditure was higher. Versus the same quarter one year earlier, operating cash flow and free cash flow also decreased, and capital expenditure increased substantially.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.4B
Trailing twelve-month free cash flow.
Quarter free cash flow
$573.3M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$866.3M
Cash generated by operations before capital spending.
CapEx
$293.0M
Capital spending and related asset purchases.
FCF margin
13.6%
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 | $3.6B | $795.2M | $174.5M | $620.7M | 17.0% |
| 2023-03-31 | $3.7B | $713.8M | $223.3M | $490.5M | 13.2% |
| 2023-06-30 | $4.1B | $937.6M | $237.7M | $699.9M | 17.2% |
| 2023-09-30 | $4.2B | $866.3M | $293.0M | $573.3M | 13.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 88.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 7.0% | 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.
Capital Expenditure Increase
Capital expenditure rose relative to both the prior quarter and the same quarter last year, absorbing a larger share of operating cash flow. This was the most observable factor behind the decline in free cash flow.
Higher capital expenditure reduced free cash flow and margin, even as revenue grew.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased, but the conversion into operating cash flow was lower, and the proportion of capital expenditure relative to revenue was higher. This resulted in a lower free cash flow margin.
Compared to the immediately preceding quarter, operating cash flow and free cash flow were lower, while capital expenditure was higher. Versus the same quarter one year earlier, operating cash flow and free cash flow also decreased, and capital expenditure increased substantially.
Monitor capital expenditure trends, as the elevated level compared to prior periods directly pressured free cash flow.