Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow margin weakened sequentially but improved compared to the same quarter last year. Operating cash flow decreased more than revenue from the prior quarter, while capital expenditure remained relatively stable.
- Revenue was lower than the prior quarter, and operating cash flow declined at a faster pace, resulting in a lower free cash flow margin. Compared to the same quarter a year earlier, revenue increased and operating cash flow rose more strongly, leading to a higher free cash flow margin.
- Sequentially, revenue, operating cash flow, and free cash flow were all lower, and the free cash flow margin weakened. Year-over-year, all three metrics improved, with the free cash flow margin also improving.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.4B
Trailing twelve-month free cash flow.
Quarter free cash flow
$272.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$306.0M
Cash generated by operations before capital spending.
CapEx
$34.0M
Capital spending and related asset purchases.
FCF margin
7.7%
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 | $3.4B | $464.0M | $34.0M | $430.0M | 12.5% |
| 2023-03-31 | $3.3B | $278.0M | $25.0M | $253.0M | 7.6% |
| 2023-06-30 | $3.7B | $446.0M | $37.0M | $409.0M | 11.0% |
| 2023-09-30 | $3.5B | $306.0M | $34.0M | $272.0M | 7.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 72.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.0% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$5.7B | 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 conversion
Operating cash flow decreased more than revenue from the prior quarter, driving a lower free cash flow and a weaker margin. This relationship was the most notable observable change in the quarter.
The lower conversion rate reduced free cash flow relative to revenue, affecting the overall cash generation efficiency.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was lower than the prior quarter, and operating cash flow declined at a faster pace, resulting in a lower free cash flow margin. Compared to the same quarter a year earlier, revenue increased and operating cash flow rose more strongly, leading to a higher free cash flow margin.
Sequentially, revenue, operating cash flow, and free cash flow were all lower, and the free cash flow margin weakened. Year-over-year, all three metrics improved, with the free cash flow margin also improving.
Monitor the conversion of revenue into operating cash flow, as the sequential decline in operating cash flow outpaced the revenue decline.