Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
In the current quarter, free cash flow margin weakened compared to both the prior quarter and the same quarter last year. Revenue, operating cash flow, and free cash flow all declined.
- Operating cash flow decreased relative to the prior quarter and the year-ago period, while capital expenditure was lower than the prior quarter but higher than the year-ago period, resulting in a lower free cash flow margin.
- Compared to the immediately preceding quarter, revenue, operating cash flow, and free cash flow were lower, and the free cash flow margin weakened. Versus the same quarter one year earlier, all metrics were lower, with capital expenditure higher than that period.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.9B
Trailing twelve-month free cash flow.
Quarter free cash flow
$349.7M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$864.6M
Cash generated by operations before capital spending.
CapEx
$514.9M
Capital spending and related asset purchases.
FCF margin
8.3%
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 | $4.9B | $733.8M | $226.3M | $507.5M | 10.4% |
| 2023-06-30 | $5.1B | $807.8M | $358.3M | $449.5M | 8.8% |
| 2023-09-30 | $4.6B | $1.1B | $558.4M | $555.3M | 12.1% |
| 2023-12-31 | $4.2B | $864.6M | $514.9M | $349.7M | 8.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 82.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 12.2% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$1.7B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Decline in Operating Cash Flow
Operating cash flow decreased from both the prior quarter and the year-ago quarter, which directly reduced free cash flow. The decline in revenue also contributed to the lower cash generation.
The lower operating cash flow drove the weakening of free cash flow and the free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow decreased relative to the prior quarter and the year-ago period, while capital expenditure was lower than the prior quarter but higher than the year-ago period, resulting in a lower free cash flow margin.
Compared to the immediately preceding quarter, revenue, operating cash flow, and free cash flow were lower, and the free cash flow margin weakened. Versus the same quarter one year earlier, all metrics were lower, with capital expenditure higher than that period.
Monitor the trend of capital expenditure relative to operating cash flow, as the company describes its business as capital intensive and requiring substantial expenditures.