Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow decreased sequentially as operating cash flow declined while capital expenditure rose, but improved versus the same quarter last year on higher revenue and operating cash flow. The free cash flow margin weakened from the prior quarter yet strengthened compared to the year-ago period.
- Revenue declined from the prior quarter, and operating cash flow fell more sharply, resulting in lower free cash flow and a weaker free cash flow margin. Compared with the same quarter a year ago, revenue and operating cash flow were higher, leading to improved free cash flow and margin despite higher capital expenditure.
- Sequentially, both operating cash flow and free cash flow were lower, and the free cash flow margin weakened. Year over year, operating cash flow, free cash flow, and the margin were all higher, while capital expenditure also increased.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.4B
Trailing twelve-month free cash flow.
Quarter free cash flow
$297.1M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$474.5M
Cash generated by operations before capital spending.
CapEx
$177.4M
Capital spending and related asset purchases.
FCF margin
8.9%
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 | $2.8B | $3.4M | $181.4M | -$178.0M | -6.4% |
| 2023-06-30 | $3.9B | $891.0M | $153.7M | $737.3M | 19.0% |
| 2023-09-30 | $3.9B | $710.1M | $159.0M | $551.1M | 14.1% |
| 2023-12-31 | $3.3B | $474.5M | $177.4M | $297.1M | 8.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 287.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 5.3% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$5.3B | 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 fell substantially from the prior quarter, which was the strongest observable driver behind the sequential drop in free cash flow and margin. This occurred even though revenue also declined.
The reduction in operating cash flow directly weakened free cash flow generation compared with the preceding quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue declined from the prior quarter, and operating cash flow fell more sharply, resulting in lower free cash flow and a weaker free cash flow margin. Compared with the same quarter a year ago, revenue and operating cash flow were higher, leading to improved free cash flow and margin despite higher capital expenditure.
Sequentially, both operating cash flow and free cash flow were lower, and the free cash flow margin weakened. Year over year, operating cash flow, free cash flow, and the margin were all higher, while capital expenditure also increased.
Monitor the trend in capital expenditure, which rose sequentially and year over year, as its growth relative to operating cash flow directly affects free cash flow conversion.