Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Cash conversion weakened compared to the prior quarter as operating cash flow decreased despite higher revenue, leading to lower free cash flow and margin. Relative to the same quarter last year, free cash flow margin improved but absolute free cash flow was lower.
- Revenue increased from the prior quarter, yet operating cash flow fell, resulting in a lower free cash flow and margin. Capital expenditure was higher than the previous quarter, adding to the cash outflow.
- Compared to the immediately preceding quarter, revenue was higher, operating cash flow and free cash flow were lower, capital expenditure was higher, and the free cash flow margin weakened. Versus the same quarter one year earlier, revenue was lower, operating cash flow and free cash flow were lower, capital expenditure was lower, and the free cash flow margin improved.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.3B
Trailing twelve-month free cash flow.
Quarter free cash flow
$544.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.2B
Cash generated by operations before capital spending.
CapEx
$690.0M
Capital spending and related asset purchases.
FCF margin
17.8%
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 | $4.1B | $1.2B | $2.2B | -$932.0M | -22.6% |
| 2023-03-31 | $3.1B | $1.5B | $545.0M | $969.0M | 31.1% |
| 2023-06-30 | $2.8B | $1.4B | $610.0M | $767.0M | 27.4% |
| 2023-09-30 | $3.1B | $1.2B | $690.0M | $544.0M | 17.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 83.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 22.5% | 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.
Operating Cash Flow Decline
Operating cash flow decreased from both the prior quarter and the year-ago quarter, while revenue moved in opposite directions—higher than the prior quarter but lower than the year-ago period.
Lower operating cash flow constrained free cash flow, resulting in a weaker cash conversion rate relative to the prior quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased from the prior quarter, yet operating cash flow fell, resulting in a lower free cash flow and margin. Capital expenditure was higher than the previous quarter, adding to the cash outflow.
Compared to the immediately preceding quarter, revenue was higher, operating cash flow and free cash flow were lower, capital expenditure was higher, and the free cash flow margin weakened. Versus the same quarter one year earlier, revenue was lower, operating cash flow and free cash flow were lower, capital expenditure was lower, and the free cash flow margin improved.
Monitor the trend in operating cash flow, as it declined despite a revenue increase from the prior quarter.