Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow declined from the prior quarter and the year-ago quarter, driven by lower operating cash flow and higher capital expenditure. The free cash flow margin weakened sequentially and year-over-year.
- Revenue was stable sequentially and higher year-over-year, but operating cash flow decreased compared to both periods, resulting in lower free cash flow. Capital expenditure increased year-over-year, further reducing free cash flow.
- Compared to the prior quarter, operating cash flow and free cash flow were lower, while capital expenditure was slightly higher. Versus the same quarter last year, revenue was higher but operating cash flow was lower, and capital expenditure increased, leading to a lower free cash flow.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$3.0B
Trailing twelve-month free cash flow.
Quarter free cash flow
$708.2M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$935.9M
Cash generated by operations before capital spending.
CapEx
$227.7M
Capital spending and related asset purchases.
FCF margin
50.2%
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 | $1.4B | $932.1M | $184.6M | $747.5M | 53.4% |
| 2023-03-31 | $1.4B | $828.7M | $166.1M | $662.6M | 49.1% |
| 2023-06-30 | $1.4B | $1.1B | $221.2M | $908.3M | 66.3% |
| 2023-09-30 | $1.4B | $935.9M | $227.7M | $708.2M | 50.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 104.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 16.1% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$24.1B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Operating Cash Flow Decline
Operating cash flow decreased compared to both the prior quarter and the year-ago quarter, while revenue was stable or higher. This divergence is the strongest observable driver of the free cash flow decline.
The lower operating cash flow directly reduced free cash flow, despite relatively stable capital expenditure.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was stable sequentially and higher year-over-year, but operating cash flow decreased compared to both periods, resulting in lower free cash flow. Capital expenditure increased year-over-year, further reducing free cash flow.
Compared to the prior quarter, operating cash flow and free cash flow were lower, while capital expenditure was slightly higher. Versus the same quarter last year, revenue was higher but operating cash flow was lower, and capital expenditure increased, leading to a lower free cash flow.
Monitor the trend in operating cash flow, as it declined both sequentially and year-over-year despite stable revenue.