Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Universal Health Services generated positive free cash flow in the current quarter, a notable improvement from the negative free cash flow in the prior quarter. Operating cash flow strengthened while capital expenditure was slightly higher than the prior quarter, supporting a higher free cash flow margin compared to both the previous quarter and the same quarter one year earlier.
- Revenue was higher than the prior quarter and the same quarter last year. Operating cash flow grew significantly from the prior quarter and also increased compared to the same quarter last year, while capital expenditure was slightly higher than both comparison periods. The resulting free cash flow turned positive and improved from the prior quarter and the same quarter last year, with free cash flow margin also higher.
- Compared to the prior quarter, free cash flow improved from negative to positive, driven by a stronger operating cash flow despite a slightly higher capital expenditure. Compared to the same quarter last year, free cash flow and free cash flow margin were both higher, with operating cash flow up and capital expenditure slightly higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$524.7M
Trailing twelve-month free cash flow.
Quarter free cash flow
$246.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$452.4M
Cash generated by operations before capital spending.
CapEx
$206.4M
Capital spending and related asset purchases.
FCF margin
6.6%
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 |
|---|---|---|---|---|---|
| 2023-03-31 | $3.5B | $290.8M | $168.8M | $122.0M | 3.5% |
| 2023-06-30 | $3.5B | $362.9M | $167.9M | $195.0M | 5.5% |
| 2023-09-30 | $3.6B | $161.7M | $200.0M | -$38.3M | -1.1% |
| 2023-12-31 | $3.7B | $452.4M | $206.4M | $246.0M | 6.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 113.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 5.6% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$4.8B | 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 improvement
Operating cash flow rose significantly compared to the prior quarter and was also higher than the same quarter last year. This improvement was the primary factor behind the swing from negative to positive free cash flow.
The stronger operating cash flow directly lifted free cash flow and its margin, marking a clear recovery from the prior quarter's negative free cash flow.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher than the prior quarter and the same quarter last year. Operating cash flow grew significantly from the prior quarter and also increased compared to the same quarter last year, while capital expenditure was slightly higher than both comparison periods. The resulting free cash flow turned positive and improved from the prior quarter and the same quarter last year, with free cash flow margin also higher.
Compared to the prior quarter, free cash flow improved from negative to positive, driven by a stronger operating cash flow despite a slightly higher capital expenditure. Compared to the same quarter last year, free cash flow and free cash flow margin were both higher, with operating cash flow up and capital expenditure slightly higher.
Monitor the trend of capital expenditure relative to operating cash flow, as it influences the magnitude of free cash flow.