Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was slightly higher than both the prior quarter and the same quarter last year. Operating cash flow increased substantially from the prior quarter, leading to improved free cash flow margin, though capital expenditure also rose significantly.
- Operating cash flow as a percentage of revenue improved from the prior quarter, but capital expenditure consumed a larger share of that cash flow compared to the year-ago quarter. Free cash flow margin rose sequentially but remained below the year-ago level.
- Compared to the prior quarter, free cash flow and margin both improved, driven by higher operating cash flow. Versus the same quarter last year, free cash flow and margin declined, as capital expenditure more than offset the increase in operating cash flow.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$626.6M
Trailing twelve-month free cash flow.
Quarter free cash flow
$236.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$547.7M
Cash generated by operations before capital spending.
CapEx
$311.7M
Capital spending and related asset purchases.
FCF margin
10.8%
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 | $1.7B | $399.9M | $162.2M | $237.7M | 13.7% |
| 2023-03-31 | $1.6B | $221.3M | $193.6M | $27.7M | 1.7% |
| 2023-06-30 | $2.1B | $286.2M | $161.0M | $125.2M | 5.9% |
| 2023-09-30 | $2.2B | $547.7M | $311.7M | $236.0M | 10.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 85.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 14.3% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$3.5B | 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 Growth
Operating cash flow increased significantly from the prior quarter, more than offsetting the rise in capital expenditure and resulting in higher free cash flow. Compared to the year-ago quarter, operating cash flow also grew, but capital expenditure rose at a faster pace.
The improvement in operating cash flow was the primary factor behind the sequential increase in free cash flow and margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a percentage of revenue improved from the prior quarter, but capital expenditure consumed a larger share of that cash flow compared to the year-ago quarter. Free cash flow margin rose sequentially but remained below the year-ago level.
Compared to the prior quarter, free cash flow and margin both improved, driven by higher operating cash flow. Versus the same quarter last year, free cash flow and margin declined, as capital expenditure more than offset the increase in operating cash flow.
The significant increase in capital expenditure relative to revenue and operating cash flow warrants attention, as it directly impacts free cash flow generation.