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 as operating cash flow declined from the prior quarter, but the margin improved markedly compared to the same quarter last year. The period showed a cash conversion profile that was lower than the preceding quarter yet stronger year over year.
- Revenue declined from the prior quarter, and operating cash flow decreased more significantly, resulting in a lower free cash flow margin. Capital expenditure was slightly reduced, but the larger drop in operating cash flow drove the cash conversion lower.
- Compared to the immediately preceding quarter, free cash flow margin was lower due to a proportionally larger decline in operating cash flow relative to revenue. Versus the same quarter one year earlier, margin was higher as operating cash flow grew faster than revenue.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.8B
Trailing twelve-month free cash flow.
Quarter free cash flow
$552.2M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$650.0M
Cash generated by operations before capital spending.
CapEx
$97.7M
Capital spending and related asset purchases.
FCF margin
11.4%
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 | $4.7B | $618.8M | $102.1M | $516.6M | 11.1% |
| 2023-03-31 | $5.1B | $718.8M | $86.9M | $631.9M | 12.5% |
| 2023-06-30 | $5.1B | $1.2B | $108.4M | $1.1B | 21.1% |
| 2023-09-30 | $4.8B | $650.0M | $97.7M | $552.2M | 11.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 84.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.0% | 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.
Year-over-year free cash flow improvement
Free cash flow margin increased compared to the year-ago quarter, supported by higher operating cash flow while capital expenditure also increased.
The improved cash generation versus the prior year indicates a stronger underlying cash conversion efficiency.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue declined from the prior quarter, and operating cash flow decreased more significantly, resulting in a lower free cash flow margin. Capital expenditure was slightly reduced, but the larger drop in operating cash flow drove the cash conversion lower.
Compared to the immediately preceding quarter, free cash flow margin was lower due to a proportionally larger decline in operating cash flow relative to revenue. Versus the same quarter one year earlier, margin was higher as operating cash flow grew faster than revenue.
Monitor whether the sequential decline in operating cash flow reverses in the coming quarter.