Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was stable compared to the prior quarter and higher than a year ago, but operating cash flow declined sharply, resulting in a much lower free cash flow margin. The filing notes that working capital remained consistent year-over-year, with income from operations partly offset by investment activities and share repurchases.
- With revenue unchanged from the previous quarter, operating cash flow was substantially lower, while capital expenditure increased slightly. As a result, free cash flow and free cash flow margin fell markedly.
- Compared to the immediately preceding quarter, free cash flow was much lower and the margin weakened. Versus the same quarter one year earlier, free cash flow and margin were also lower, despite slightly higher revenue.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$3.3B
Trailing twelve-month free cash flow.
Quarter free cash flow
$176.5M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$234.6M
Cash generated by operations before capital spending.
CapEx
$58.1M
Capital spending and related asset purchases.
FCF margin
7.0%
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 | $2.4B | $899.9M | $42.1M | $857.8M | 36.1% |
| 2023-06-30 | $2.5B | $1.1B | $59.6M | $1.1B | 43.1% |
| 2023-09-30 | $2.5B | $1.3B | $40.6M | $1.2B | 49.4% |
| 2023-12-31 | $2.5B | $234.6M | $58.1M | $176.5M | 7.0% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 18.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.3% | Lower capital intensity usually supports FCF margin. |
| Net cash | n/a | 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 was the primary factor behind the quarter's weak free cash flow, as it was much lower than both the prior quarter and the year-ago period despite similar revenue.
The free cash flow margin dropped to a level well below recent quarters.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
With revenue unchanged from the previous quarter, operating cash flow was substantially lower, while capital expenditure increased slightly. As a result, free cash flow and free cash flow margin fell markedly.
Compared to the immediately preceding quarter, free cash flow was much lower and the margin weakened. Versus the same quarter one year earlier, free cash flow and margin were also lower, despite slightly higher revenue.
Monitor the level of operating cash flow in the next quarter to assess whether the decline is a temporary shift.