Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Operating cash flow improved from the prior quarter, lifting free cash flow and margin, but both remained below the year-ago level. The sequential gain was driven by higher operating cash flow despite slightly increased capital spending.
- Revenue was stable relative to the prior quarter, while operating cash flow increased substantially, resulting in a higher free cash flow and margin. The gap between operating cash flow and capital expenditure widened favorably.
- Compared to the prior quarter, operating cash flow and free cash flow were higher, and free cash flow margin improved. Versus the same quarter one year earlier, all measures were lower, with operating cash flow showing the largest relative decline.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$4.5B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.3B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.9B
Cash generated by operations before capital spending.
CapEx
$560.0M
Capital spending and related asset purchases.
FCF margin
13.0%
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 | $10.1B | $2.3B | $610.0M | $1.7B | 17.0% |
| 2023-03-31 | $9.7B | $1.1B | $380.0M | $763.0M | 7.8% |
| 2023-06-30 | $10.0B | $1.2B | $507.0M | $696.0M | 7.0% |
| 2023-09-30 | $10.1B | $1.9B | $560.0M | $1.3B | 13.0% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 91.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 5.5% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$8.8B | 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 recovery
Operating cash flow rose sequentially, outpacing the modest increase in capital expenditure and driving a higher free cash flow. The improvement was the primary factor behind the quarter's stronger cash conversion.
The sequential increase in operating cash flow is the strongest observable driver of the quarter's free cash flow improvement.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was stable relative to the prior quarter, while operating cash flow increased substantially, resulting in a higher free cash flow and margin. The gap between operating cash flow and capital expenditure widened favorably.
Compared to the prior quarter, operating cash flow and free cash flow were higher, and free cash flow margin improved. Versus the same quarter one year earlier, all measures were lower, with operating cash flow showing the largest relative decline.
Monitor whether operating cash flow can sustain the sequential improvement given the year-over-year decline and the increase in capital spending.