Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow declined from both the prior quarter and the same quarter a year earlier, driven by lower revenue and operating cash flow. The free cash flow margin also weakened, reflecting reduced cash conversion efficiency.
- Revenue and operating cash flow were lower than the prior quarter and the year-ago quarter, while capital expenditure was below the prior quarter but above the year-ago level. As a result, free cash flow and its margin decreased, indicating a weaker cash conversion rate.
- Compared to the immediately preceding quarter, revenue, operating cash flow, free cash flow, and margin all declined. Versus the same quarter one year earlier, the same metrics were lower, with the exception of capital expenditure which was slightly higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$23.5B
Trailing twelve-month free cash flow.
Quarter free cash flow
$4.0B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$4.2B
Cash generated by operations before capital spending.
CapEx
$175.0M
Capital spending and related asset purchases.
FCF margin
32.9%
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 |
|---|---|---|---|---|---|
| 2022-06-30 | $14.6B | $5.0B | $143.0M | $4.9B | 33.3% |
| 2022-09-30 | $14.8B | $7.6B | $177.0M | $7.4B | 50.1% |
| 2022-12-31 | $15.1B | $7.4B | $213.0M | $7.2B | 47.7% |
| 2023-03-31 | $12.2B | $4.2B | $175.0M | $4.0B | 32.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 1681.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.4% | 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.
Lower Net Revenue
Net revenue decreased compared to both the prior quarter and the same quarter a year ago, which the filing cites as a primary factor for the decline in operating cash flow.
This decline in revenue was the most significant observable driver of the reduced free cash flow and margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue and operating cash flow were lower than the prior quarter and the year-ago quarter, while capital expenditure was below the prior quarter but above the year-ago level. As a result, free cash flow and its margin decreased, indicating a weaker cash conversion rate.
Compared to the immediately preceding quarter, revenue, operating cash flow, free cash flow, and margin all declined. Versus the same quarter one year earlier, the same metrics were lower, with the exception of capital expenditure which was slightly higher.
Monitor the trend in net revenues and the timing of working capital adjustments, as these were cited as factors affecting operating cash flow.