Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Cash conversion improved sharply versus both the prior quarter and the same quarter last year, driven by a higher operating cash flow relative to revenue. Free cash flow margin strengthened as capital expenditure remained low.
- Revenue was higher than both the preceding quarter and the year-ago quarter, while operating cash flow increased substantially, leading to a much higher free cash flow and free cash flow margin. Capital expenditure was lower than the year-ago quarter and similar to the prior quarter.
- Compared to the immediately preceding quarter, revenue, operating cash flow, free cash flow, and free cash flow margin all improved. Versus the same quarter one year earlier, all metrics were higher, with operating cash flow and free cash flow showing a larger increase relative to revenue.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.3B
Trailing twelve-month free cash flow.
Quarter free cash flow
$803.7M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$826.5M
Cash generated by operations before capital spending.
CapEx
$22.8M
Capital spending and related asset purchases.
FCF margin
38.6%
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 |
|---|---|---|---|---|---|
| 2023-04-01 | $1.5B | $112.4M | $40.8M | $71.6M | 4.7% |
| 2023-07-01 | $1.6B | $400.4M | $34.6M | $365.8M | 22.6% |
| 2023-09-30 | $1.5B | $75.3M | $20.9M | $54.4M | 3.6% |
| 2023-12-30 | $2.1B | $826.5M | $22.8M | $803.7M | 38.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 249.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.1% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$881.3M | 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 Strength
Operating cash flow was substantially higher than both the prior quarter and the year-ago quarter, while revenue also increased. This combination drove a significant improvement in free cash flow and free cash flow margin.
The higher operating cash flow was the strongest observable driver of the quarter's cash conversion improvement.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher than both the preceding quarter and the year-ago quarter, while operating cash flow increased substantially, leading to a much higher free cash flow and free cash flow margin. Capital expenditure was lower than the year-ago quarter and similar to the prior quarter.
Compared to the immediately preceding quarter, revenue, operating cash flow, free cash flow, and free cash flow margin all improved. Versus the same quarter one year earlier, all metrics were higher, with operating cash flow and free cash flow showing a larger increase relative to revenue.
Monitor whether operating cash flow can sustain its elevated level relative to revenue in future quarters.