Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow and margin weakened sequentially despite stable revenue, as capital expenditure rose sharply. Compared to the same quarter last year, free cash flow and margin improved significantly on higher operating cash flow and revenue.
- Revenue was stable quarter over quarter, but operating cash flow increased slightly, while capital expenditure rose substantially, causing free cash flow and margin to decline. Compared to the prior year, revenue and operating cash flow were higher, and the increase in capital expenditure was outpaced by operating cash flow growth, resulting in improved free cash flow and margin.
- Sequentially, free cash flow and margin were lower, driven by a notable increase in capital expenditure. Year over year, free cash flow and margin were higher, supported by stronger operating cash flow and revenue.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.8B
Trailing twelve-month free cash flow.
Quarter free cash flow
$340.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.4B
Cash generated by operations before capital spending.
CapEx
$1.0B
Capital spending and related asset purchases.
FCF margin
6.5%
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 | $4.9B | $1.0B | $660.0M | $384.0M | 7.8% |
| 2023-06-30 | $5.1B | $1.0B | $520.0M | $510.0M | 10.0% |
| 2023-09-30 | $5.2B | $1.3B | $673.0M | $590.0M | 11.4% |
| 2023-12-31 | $5.2B | $1.4B | $1.0B | $340.0M | 6.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 69.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 20.0% | 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.
Capital Expenditure Increase
Capital expenditure rose substantially from the prior quarter, outpacing the modest increase in operating cash flow and leading to a decline in free cash flow and margin. Compared to the same quarter last year, capital expenditure was also higher, but operating cash flow growth was sufficient to support improved free cash flow.
The sequential rise in capital expenditure was the strongest observable driver of the weakening in free cash flow and margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was stable quarter over quarter, but operating cash flow increased slightly, while capital expenditure rose substantially, causing free cash flow and margin to decline. Compared to the prior year, revenue and operating cash flow were higher, and the increase in capital expenditure was outpaced by operating cash flow growth, resulting in improved free cash flow and margin.
Sequentially, free cash flow and margin were lower, driven by a notable increase in capital expenditure. Year over year, free cash flow and margin were higher, supported by stronger operating cash flow and revenue.
Monitor the trend in capital expenditure, as its sequential increase was the primary factor behind the weakening of free cash flow and margin.