Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow weakened compared to both the prior quarter and the same quarter a year ago, despite revenue remaining stable. The decline was driven by lower operating cash flow and higher capital expenditure.
- Operating cash flow converted into free cash flow at a lower margin than the preceding quarter and the year-ago quarter, as capital expenditure increased while operating cash flow held steady sequentially and decreased year over year.
- Compared with the immediately preceding quarter, free cash flow was lower and the margin narrowed, driven by higher capital expenditure on similar revenue and operating cash flow. Versus the same quarter a year ago, free cash flow and margin both weakened substantially, as operating cash flow was markedly lower and capital spending was higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$3.9B
Trailing twelve-month free cash flow.
Quarter free cash flow
$838.3M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.1B
Cash generated by operations before capital spending.
CapEx
$251.4M
Capital spending and related asset purchases.
FCF margin
24.4%
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 |
|---|---|---|---|---|---|
| 2023-03-31 | $3.2B | $1.4B | $178.2M | $1.2B | 37.6% |
| 2023-06-30 | $3.2B | $1.0B | $113.0M | $909.4M | 28.8% |
| 2023-09-30 | $3.4B | $1.1B | $176.0M | $938.3M | 27.9% |
| 2023-12-31 | $3.4B | $1.1B | $251.4M | $838.3M | 24.4% |
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 | 7.3% | 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.
Weaker Operating Cash Flow
Operating cash flow was unchanged from the prior quarter but significantly lower than the same quarter a year ago, while revenue remained flat across all periods. This was the primary observable driver of the decline in free cash flow.
Lower operating cash flow directly reduced free cash flow and compressed the margin, even before the effect of higher capital spending.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow converted into free cash flow at a lower margin than the preceding quarter and the year-ago quarter, as capital expenditure increased while operating cash flow held steady sequentially and decreased year over year.
Compared with the immediately preceding quarter, free cash flow was lower and the margin narrowed, driven by higher capital expenditure on similar revenue and operating cash flow. Versus the same quarter a year ago, free cash flow and margin both weakened substantially, as operating cash flow was markedly lower and capital spending was higher.
Monitor trends in capital expenditure, which increased sequentially and year over year, as the company noted potential needs for additional manufacturing capabilities.