Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow margin improved compared to both the prior quarter and the same quarter last year, as lower capital expenditure more than offset a decline in operating cash flow. Revenue decreased, but the company generated higher free cash flow than the prior quarter due to reduced capital spending.
- Revenue was lower, operating cash flow also declined, but capital expenditure fell more sharply, leading to an increase in free cash flow and an improved free cash flow margin.
- Compared to the immediately preceding quarter, free cash flow was higher and margin improved, while revenue was lower. Versus the same quarter one year earlier, free cash flow was slightly lower but margin improved due to a larger reduction in capital expenditure relative to the decline in operating cash flow.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$824.2M
Trailing twelve-month free cash flow.
Quarter free cash flow
$249.7M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$339.5M
Cash generated by operations before capital spending.
CapEx
$89.8M
Capital spending and related asset purchases.
FCF margin
12.9%
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 |
|---|---|---|---|---|---|
| 2022-12-31 | $2.0B | $420.1M | $247.1M | $173.0M | 8.7% |
| 2023-03-31 | $2.0B | $280.4M | $112.4M | $168.0M | 8.5% |
| 2023-06-30 | $2.0B | $359.9M | $126.4M | $233.5M | 12.0% |
| 2023-09-30 | $1.9B | $339.5M | $89.8M | $249.7M | 12.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 136.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 4.6% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$1.9B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Lower Capital Spending
The quarter's free cash flow benefited from a notable reduction in capital expenditure compared to both the prior quarter and the year-ago period, while operating cash flow remained relatively stable.
This allowed the company to improve its free cash flow margin despite lower revenue.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was lower, operating cash flow also declined, but capital expenditure fell more sharply, leading to an increase in free cash flow and an improved free cash flow margin.
Compared to the immediately preceding quarter, free cash flow was higher and margin improved, while revenue was lower. Versus the same quarter one year earlier, free cash flow was slightly lower but margin improved due to a larger reduction in capital expenditure relative to the decline in operating cash flow.
Monitor the trend in capital expenditure, as it significantly influenced free cash flow this quarter.