Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow margin weakened sequentially but improved year-over-year. Operating cash flow declined from the prior quarter while revenue rose slightly, indicating a shift in cash conversion efficiency.
- Revenue increased modestly from the prior quarter, but operating cash flow decreased, leading to a lower free cash flow margin. Capital expenditure was reduced, partially offsetting the decline in operating cash flow.
- Compared to the prior quarter, free cash flow margin was lower due to a larger drop in operating cash flow relative to revenue. Versus the same quarter last year, free cash flow margin improved as revenue and operating cash flow both increased, with capital expenditure declining.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$7.6B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.8B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.9B
Cash generated by operations before capital spending.
CapEx
$91.0M
Capital spending and related asset purchases.
FCF margin
36.4%
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 |
|---|---|---|---|---|---|
| 2022-12-02 | $4.5B | $2.3B | $91.0M | $2.2B | 49.4% |
| 2023-03-03 | $4.7B | $1.7B | $101.0M | $1.6B | 34.2% |
| 2023-06-02 | $4.8B | $2.1B | $121.0M | $2.0B | 41.9% |
| 2023-09-01 | $4.9B | $1.9B | $91.0M | $1.8B | 36.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 127.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.9% | Lower capital intensity usually supports FCF margin. |
| Net cash | $3.0B | 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 the prior quarter while revenue increased, resulting in a lower free cash flow margin. This shift in cash conversion efficiency is the strongest observable driver of the quarter's performance.
If operating cash flow continues to lag revenue growth, free cash flow margin may remain under pressure.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased modestly from the prior quarter, but operating cash flow decreased, leading to a lower free cash flow margin. Capital expenditure was reduced, partially offsetting the decline in operating cash flow.
Compared to the prior quarter, free cash flow margin was lower due to a larger drop in operating cash flow relative to revenue. Versus the same quarter last year, free cash flow margin improved as revenue and operating cash flow both increased, with capital expenditure declining.
Monitor the trend in operating cash flow relative to revenue, as it declined sequentially despite higher revenue.