Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Cash conversion improved dramatically year-over-year but weakened sequentially. Operating cash flow increased relative to revenue compared to the same quarter last year, yet declined from the prior quarter.
- Revenue was lower than the previous quarter, and operating cash flow declined more sharply, resulting in a lower free cash flow margin. Compared to the same quarter one year earlier, revenue was lower but operating cash flow was substantially higher, leading to a significant improvement in free cash flow and margin.
- Quarter-over-quarter, revenue, operating cash flow, capital expenditure, free cash flow, and margin all decreased. Year-over-year, free cash flow and margin improved markedly despite lower revenue, while capital expenditure was slightly higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$3.8B
Trailing twelve-month free cash flow.
Quarter free cash flow
$467.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$881.0M
Cash generated by operations before capital spending.
CapEx
$414.0M
Capital spending and related asset purchases.
FCF margin
16.2%
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 | $3.1B | $1.4B | $484.0M | $951.0M | 30.6% |
| 2023-06-30 | $3.0B | $1.6B | $442.0M | $1.1B | 37.5% |
| 2023-09-30 | $4.8B | $1.6B | $336.0M | $1.2B | 25.6% |
| 2023-12-31 | $2.9B | $881.0M | $414.0M | $467.0M | 16.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -253.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 14.4% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$10.9B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Year-over-year operating cash flow improvement
Operating cash flow was higher than the same quarter one year earlier, even though revenue was lower, indicating a change in cash conversion efficiency.
This drove free cash flow from a negligible level in the prior year to a positive margin in the current quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was lower than the previous quarter, and operating cash flow declined more sharply, resulting in a lower free cash flow margin. Compared to the same quarter one year earlier, revenue was lower but operating cash flow was substantially higher, leading to a significant improvement in free cash flow and margin.
Quarter-over-quarter, revenue, operating cash flow, capital expenditure, free cash flow, and margin all decreased. Year-over-year, free cash flow and margin improved markedly despite lower revenue, while capital expenditure was slightly higher.
Monitor the relationship between revenue and operating cash flow, as the quarter showed a divergence from the prior period.