steven fiorillo
Friday Night Stocks With The Crew
10/31/2025, 10:06:13 PM
Economic Summary
- Management updated its capital allocation policy to direct 70–80% of free cash flow to buybacks and dividends, down from a prior emphasis on 80% to buybacks alone; this preserves shareholder returns while adding dividend flexibility.
- The company reported very strong free cash flow this quarter and expects an excellent Q4, implying near-term cash generation remains robust and supports ongoing buybacks.
- There remains approximately $15 billion of buyback authorization outstanding, providing a sizable pool for future repurchases, though commentary suggests buyback pace might modestly decline next year.
- Under CEO-level leadership (Alex Chris), the company has materially improved its bottom-line profitability, but the top-line (revenue growth) has not yet recovered, posing a growth vs. profitability tradeoff.
Bullish
- Strong free cash flow enabling aggressive capital returns.
- Management (Alex Chris) improved profitability and is prioritizing shareholder returns.
- Company still has $15 billion remaining in buyback authorization.
Bearish
- Revenue (top line) still hasn't turned the corner, risking slower growth.
- Possible reduction in buybacks next year (from ~$6B to ~$5B) could signal lower capital return.
- Shifting 70-80% of FCF to both buybacks and dividends reduces pure buyback leverage.
People mentioned
SpencerAlex ChrisTJSteve