SB
SBAC
Sep 30, 2023
Quarter ended Sep 30, 2023 · FY2023 Q3

SBA Communications Corporation stock research

SBA Communications (SBAC) Free Cash Flow — Quarter Ended Sep 30, 2023

Revenue turned positive compared to the prior quarter but was lower than the same quarter last year. Operating cash flow and free cash flow both decreased relative to the prior quarter and the year-ago quarter, while free cash flow margin improved significantly.

Free cash flow takeaway

A quick read on the company's cash generation and what it means for investors.

Revenue turned positive compared to the prior quarter but was lower than the same quarter last year. Operating cash flow and free cash flow both decreased relative to the prior quarter and the year-ago quarter, while free cash flow margin improved significantly.

  • Operating cash flow exceeded revenue, resulting in a free cash flow margin above one hundred percent. Capital expenditure was a notable portion of operating cash flow, yet free cash flow remained positive.
  • Compared to the prior quarter, revenue improved from negative to positive, but operating cash flow and free cash flow were lower. Capital expenditure was higher than the prior quarter. Versus the same quarter last year, revenue, operating cash flow, capital expenditure, and free cash flow were all lower, while free cash flow margin was higher.

FCF snapshot

Quarterly and TTM cash-flow metrics with the minimum valuation context.

TTM free cash flow

$308.0M

Trailing twelve-month free cash flow.

Quarter free cash flow

$198.3M

Free cash flow in the selected fiscal quarter.

Operating cash flow

$313.7M

Cash generated by operations before capital spending.

CapEx

$115.4M

Capital spending and related asset purchases.

FCF margin

439.5%

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.

PeriodRevenueOperating CFCapExFCFFCF margin
2022-12-31$686.1M$288.6M$823.6M-$535.0M-78.0%
2023-03-31$675.5M$311.2M$69.3M$241.8M35.8%
2023-06-30-$564.9M$486.9M$84.0M$402.9M-71.3%
2023-09-30$45.1M$313.7M$115.4M$198.3M439.5%

Cash conversion quality

Checks that separate high-quality free cash flow from accounting noise or working-capital timing.

FCF / net income226.8%Shows whether accounting earnings convert into cash.
CapEx / revenue255.9%Lower capital intensity usually supports FCF margin.
Net cash-$12.3BCash and equivalents minus total debt.

Recent events shaping cash flow

Near-term business events that help explain the free cash flow result.

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Free Cash Flow Margin Expansion

The free cash flow margin increased compared to both the prior quarter and the year-ago quarter, with operating cash flow substantially higher than revenue. The company's primary business is site leasing, which contributed the majority of segment operating profit.

This margin expansion highlights a divergence between revenue and cash generation, warranting attention to the sustainability of cash flows.

What the cash flow says

How to interpret the company's free cash flow beyond the headline number.

Operating cash flow exceeded revenue, resulting in a free cash flow margin above one hundred percent. Capital expenditure was a notable portion of operating cash flow, yet free cash flow remained positive.

Compared to the prior quarter, revenue improved from negative to positive, but operating cash flow and free cash flow were lower. Capital expenditure was higher than the prior quarter. Versus the same quarter last year, revenue, operating cash flow, capital expenditure, and free cash flow were all lower, while free cash flow margin was higher.

Monitor the trend in revenue relative to operating cash flow, as the current quarter's operating cash flow significantly exceeded revenue.