Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned strongly positive this quarter, with a significant margin improvement compared to both the prior quarter and the same quarter last year. The improvement was driven by a large swing in operating cash flow despite a slight decline in revenue year over year.
- Revenue was higher than the prior quarter but lower than the same quarter one year earlier. Operating cash flow turned from a large outflow in the prior quarter to a substantial inflow this quarter, and was much higher than the same quarter last year. Capital expenditure was slightly lower than the prior quarter and similar to the year-ago level, resulting in a free cash flow margin that improved markedly from both comparison periods.
- Compared to the prior quarter, revenue was higher, operating cash flow improved from negative to positive, capital expenditure was lower, and free cash flow and margin were substantially higher. Compared to the same quarter one year earlier, revenue was lower, but operating cash flow, free cash flow, and margin were all higher, while capital expenditure was slightly higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$3.6B
Trailing twelve-month free cash flow.
Quarter free cash flow
$2.2B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$2.5B
Cash generated by operations before capital spending.
CapEx
$287.0M
Capital spending and related asset purchases.
FCF margin
8.8%
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 |
|---|---|---|---|---|---|
| 2022-09-30 | $24.7B | $4.0B | $341.0M | $3.7B | 14.9% |
| 2022-12-31 | $25.9B | $130.0M | $478.0M | -$348.0M | -1.3% |
| 2023-03-31 | $24.1B | -$1.6B | $327.0M | -$1.9B | -8.0% |
| 2023-06-30 | $25.2B | $2.5B | $287.0M | $2.2B | 8.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 239.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.1% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$7.1B | 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 turned from a significant outflow in the prior quarter to a substantial inflow this quarter, driving a large positive free cash flow. This swing was the strongest observable factor behind the improvement in cash conversion.
This recovery was the primary driver of the improvement in free cash flow margin compared to both the prior quarter and the same quarter last year.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher than the prior quarter but lower than the same quarter one year earlier. Operating cash flow turned from a large outflow in the prior quarter to a substantial inflow this quarter, and was much higher than the same quarter last year. Capital expenditure was slightly lower than the prior quarter and similar to the year-ago level, resulting in a free cash flow margin that improved markedly from both comparison periods.
Compared to the prior quarter, revenue was higher, operating cash flow improved from negative to positive, capital expenditure was lower, and free cash flow and margin were substantially higher. Compared to the same quarter one year earlier, revenue was lower, but operating cash flow, free cash flow, and margin were all higher, while capital expenditure was slightly higher.
Monitor the trajectory of working capital changes, which have been a notable factor in operating cash flow variability according to the filing.