Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned positive this quarter, yielding a positive margin, compared to a negative margin a year ago. Operating cash flow increased while capital spending decreased relative to the same quarter last year, though both metrics declined from the prior quarter.
- Revenue was stable compared to a year ago, while operating cash flow was higher and capital expenditure was lower, resulting in positive free cash flow and a positive margin. The margin improved from negative a year ago but weakened from the prior quarter as operating cash flow fell and capital expenditure rose sequentially.
- Compared to the immediately preceding quarter, revenue was higher but operating cash flow was lower, capital expenditure was higher, and free cash flow and margin were lower. Compared to the same quarter one year earlier, revenue was stable, operating cash flow was higher, capital expenditure was lower, and free cash flow and margin improved significantly from negative to positive.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$186.1M
Trailing twelve-month free cash flow.
Quarter free cash flow
$128.3M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$784.1M
Cash generated by operations before capital spending.
CapEx
$655.8M
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 |
|---|---|---|---|---|---|
| 2022-12-31 | $2.6B | $1.2M | $996.2M | -$995.0M | -38.9% |
| 2023-03-31 | $2.9B | $796.1M | $499.4M | $296.7M | 10.3% |
| 2023-06-30 | $1.8B | $958.2M | $574.3M | $383.9M | 21.0% |
| 2023-09-30 | $2.0B | $784.1M | $655.8M | $128.3M | 6.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 40.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 33.5% | 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.
Improved Cash Generation from Operations
Operating cash flow was substantially higher than the same quarter a year ago, while capital expenditure was slightly lower, driving a swing from negative to positive free cash flow. This improvement in cash conversion underpinned the quarter's positive margin.
The positive free cash flow and margin strengthened the company's cash position relative to the prior year period.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was stable compared to a year ago, while operating cash flow was higher and capital expenditure was lower, resulting in positive free cash flow and a positive margin. The margin improved from negative a year ago but weakened from the prior quarter as operating cash flow fell and capital expenditure rose sequentially.
Compared to the immediately preceding quarter, revenue was higher but operating cash flow was lower, capital expenditure was higher, and free cash flow and margin were lower. Compared to the same quarter one year earlier, revenue was stable, operating cash flow was higher, capital expenditure was lower, and free cash flow and margin improved significantly from negative to positive.
Monitor the company's net working capital position, as current liabilities exceeded current assets at the end of the quarter, though the company believes its liquidity sources are adequate.