Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow margin declined sequentially as operating cash flow decreased and capital expenditure increased, but remained above the year-ago level. The quarter's cash conversion was weaker than the preceding quarter yet stronger than the same period last year.
- Revenue decreased from the prior quarter, while operating cash flow declined and capital expenditure rose, causing free cash flow and margin to fall. Relative to the year-ago quarter, revenue was slightly higher, operating cash flow improved, and capital expenditure increased, resulting in higher free cash flow and margin.
- Sequentially, free cash flow margin weakened from the prior quarter. Year-over-year, the margin improved from the same quarter last year.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.6B
Trailing twelve-month free cash flow.
Quarter free cash flow
$599.1M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$918.6M
Cash generated by operations before capital spending.
CapEx
$319.5M
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 |
|---|---|---|---|---|---|
| 2023-03-31 | $5.4B | $88.2M | $209.9M | -$121.7M | -2.2% |
| 2023-06-30 | $6.2B | $1.2B | $206.1M | $1.0B | 16.0% |
| 2023-09-30 | $6.1B | $1.3B | $152.9M | $1.2B | 18.9% |
| 2023-12-31 | $5.3B | $918.6M | $319.5M | $599.1M | 11.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 168.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 6.1% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$9.2B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Capital Expenditure Increase
Capital expenditure was higher than the prior quarter, reducing free cash flow despite a year-over-year improvement in operating cash flow.
Higher capital expenditure absorbed a larger portion of operating cash flow, limiting free cash flow growth.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue decreased from the prior quarter, while operating cash flow declined and capital expenditure rose, causing free cash flow and margin to fall. Relative to the year-ago quarter, revenue was slightly higher, operating cash flow improved, and capital expenditure increased, resulting in higher free cash flow and margin.
Sequentially, free cash flow margin weakened from the prior quarter. Year-over-year, the margin improved from the same quarter last year.
The level of capital expenditure relative to operating cash flow should be monitored, as it increased from the prior quarter.