Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow margin improved significantly compared to both the prior quarter and the same quarter one year earlier. The improvement was driven by higher operating cash flow relative to revenue.
- Cash conversion improved as operating cash flow grew faster than revenue, while capital expenditure increased less than operating cash flow, leading to a higher free cash flow margin.
- Compared to the prior quarter, revenue and operating cash flow both increased materially, with operating cash flow rising more than proportionally. Capital expenditure also rose but at a slower pace. Year over year, revenue and operating cash flow were higher, while capital expenditure was lower, resulting in a strengthened free cash flow position.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$32.2B
Trailing twelve-month free cash flow.
Quarter free cash flow
$27.9B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$42.5B
Cash generated by operations before capital spending.
CapEx
$14.6B
Capital spending and related asset purchases.
FCF margin
16.4%
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 |
|---|---|---|---|---|---|
| 2023-03-31 | $127.4B | $4.8B | $14.2B | -$9.4B | -7.4% |
| 2023-06-30 | $134.4B | $16.5B | $11.5B | $5.0B | 3.7% |
| 2023-09-30 | $143.1B | $21.2B | $12.5B | $8.7B | 6.1% |
| 2023-12-31 | $170.0B | $42.5B | $14.6B | $27.9B | 16.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 262.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 8.6% | Lower capital intensity usually supports FCF margin. |
| Net cash | $6.2B | 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 Growth
Operating cash flow increased substantially compared to both the prior quarter and the same quarter last year, outpacing revenue growth.
This was the primary factor behind the expansion of free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Cash conversion improved as operating cash flow grew faster than revenue, while capital expenditure increased less than operating cash flow, leading to a higher free cash flow margin.
Compared to the prior quarter, revenue and operating cash flow both increased materially, with operating cash flow rising more than proportionally. Capital expenditure also rose but at a slower pace. Year over year, revenue and operating cash flow were higher, while capital expenditure was lower, resulting in a strengthened free cash flow position.
Monitor operating cash flow as a percentage of revenue to assess sustainability of the improved conversion.