Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow and operating cash flow were lower than both the prior quarter and the same quarter last year, while revenue also decreased. The free cash flow margin weakened compared to the year-ago period but was stable relative to the previous quarter.
- Operating cash flow as a proportion of revenue was lower than the prior and year-ago quarters, and capital expenditure increased sequentially, reducing free cash flow. The free cash flow margin remained near the prior quarter's level but was lower than a year earlier.
- Compared to the previous quarter, revenue declined while capital expenditure rose, resulting in lower free cash flow. Relative to the same quarter one year earlier, both revenue and operating cash flow decreased substantially, and free cash flow was significantly lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$488.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
$551.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$992.0M
Cash generated by operations before capital spending.
CapEx
$441.0M
Capital spending and related asset purchases.
FCF margin
8.6%
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 | $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% |
| 2023-09-30 | $6.4B | $992.0M | $441.0M | $551.0M | 8.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 67.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 6.9% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$6.7B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Weaker cash generation from operations
Operating cash flow declined sharply from both the prior quarter and the year-ago period, while revenue also fell. This narrower cash conversion was the primary factor behind the lower free cash flow.
The reduction in operating cash flow more than offset the impact of higher capital expenditure, leading to lower free cash flow.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a proportion of revenue was lower than the prior and year-ago quarters, and capital expenditure increased sequentially, reducing free cash flow. The free cash flow margin remained near the prior quarter's level but was lower than a year earlier.
Compared to the previous quarter, revenue declined while capital expenditure rose, resulting in lower free cash flow. Relative to the same quarter one year earlier, both revenue and operating cash flow decreased substantially, and free cash flow was significantly lower.
Monitor the trend in capital expenditure relative to operating cash flow, as higher spending this quarter absorbed a larger share of cash generated from operations.