Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow and its margin weakened in the current quarter compared to both the prior quarter and the same quarter last year. The decline was driven by lower operating cash flow combined with higher capital spending than a year ago.
- Cash conversion from revenue to operating cash flow weakened, as operating cash flow was lower despite higher revenue compared to the year-ago quarter. The resulting free cash flow margin narrowed, reflecting a lower proportion of revenue converted to free cash flow.
- Compared to the preceding quarter, revenue, operating cash flow, and free cash flow were all lower, while capital expenditure also decreased modestly. Versus the same quarter one year earlier, revenue was higher but operating cash flow and free cash flow were sharply lower, and capital expenditure increased.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.0B
Trailing twelve-month free cash flow.
Quarter free cash flow
$264.1M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$516.4M
Cash generated by operations before capital spending.
CapEx
$252.3M
Capital spending and related asset purchases.
FCF margin
6.9%
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 | $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% |
| 2023-12-31 | $3.8B | $516.4M | $252.3M | $264.1M | 6.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 47.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 6.6% | 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 Weakness
The most significant observable driver was the decline in operating cash flow, which fell relative to both the prior quarter and the year-ago quarter. This occurred despite revenue being higher than the same period last year, indicating a weaker cash conversion pattern.
Lower operating cash flow was the primary factor behind the reduction in free cash flow and the compression of free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Cash conversion from revenue to operating cash flow weakened, as operating cash flow was lower despite higher revenue compared to the year-ago quarter. The resulting free cash flow margin narrowed, reflecting a lower proportion of revenue converted to free cash flow.
Compared to the preceding quarter, revenue, operating cash flow, and free cash flow were all lower, while capital expenditure also decreased modestly. Versus the same quarter one year earlier, revenue was higher but operating cash flow and free cash flow were sharply lower, and capital expenditure increased.
Monitor the relationship between operating cash flow and revenue; operating cash flow moved opposite to revenue compared to the year-ago quarter.