Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
American Express reported a negative free cash flow margin for the quarter, driven by operating cash outflow that significantly exceeded capital expenditure. This represents a sharp reversal from the strong positive cash generation in both the preceding quarter and the same quarter one year earlier.
- Revenue was at a level above the year-ago quarter, but operating cash flow turned negative, resulting in a negative free cash flow and a negative free cash flow margin. Capital expenditure was lower compared to both the prior quarter and the same quarter last year.
- Compared to the immediately preceding quarter, operating cash flow, free cash flow, and free cash flow margin all weakened significantly, moving from positive to negative. Relative to the same quarter one year earlier, operating cash flow and free cash flow were also substantially lower, reversing a positive margin into a negative one.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$15.1B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$737.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
-$377.0M
Cash generated by operations before capital spending.
CapEx
$360.0M
Capital spending and related asset purchases.
FCF margin
-8.3%
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 |
|---|---|---|---|---|---|
| 2022-06-30 | $8.8B | $4.3B | $452.0M | $3.8B | 43.4% |
| 2022-09-30 | $8.7B | $4.5B | $443.0M | $4.1B | 46.5% |
| 2022-12-31 | $9.1B | $8.4B | $513.0M | $7.9B | 87.3% |
| 2023-03-31 | $8.8B | -$377.0M | $360.0M | -$737.0M | -8.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -40.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 4.1% | Lower capital intensity usually supports FCF margin. |
| Net cash | n/a | 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 reversal
Operating cash flow shifted from a large positive in both prior periods to a significant negative in the current quarter, overwhelming the lower capital expenditure and driving free cash flow deeply negative.
The negative operating cash flow was the strongest observable driver, converting a revenue base similar to prior periods into a negative free cash flow.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was at a level above the year-ago quarter, but operating cash flow turned negative, resulting in a negative free cash flow and a negative free cash flow margin. Capital expenditure was lower compared to both the prior quarter and the same quarter last year.
Compared to the immediately preceding quarter, operating cash flow, free cash flow, and free cash flow margin all weakened significantly, moving from positive to negative. Relative to the same quarter one year earlier, operating cash flow and free cash flow were also substantially lower, reversing a positive margin into a negative one.
Monitor whether operating cash flow can return to positive levels in the coming quarter, given the large negative swing from both the prior and year-ago quarters.