Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue increased relative to both the prior quarter and the same quarter one year earlier, but free cash flow decreased in both comparisons due to a lower operating cash flow. The free cash flow margin weakened compared with both periods.
- Operating cash flow was lower than the prior quarter and the year-ago quarter, while capital expenditure was higher than the prior quarter but lower than the year-ago quarter. The resulting free cash flow and free cash flow margin both declined, indicating a weaker conversion of revenue into cash.
- Compared with the immediately preceding quarter, revenue was higher but operating cash flow, free cash flow, and margin were all lower. Versus the same quarter one year earlier, revenue was higher while operating cash flow, free cash flow, and margin were also lower, with capital expenditure lower as well.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$17.0B
Trailing twelve-month free cash flow.
Quarter free cash flow
$6.3B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$6.8B
Cash generated by operations before capital spending.
CapEx
$426.0M
Capital spending and related asset purchases.
FCF margin
66.3%
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 |
|---|---|---|---|---|---|
| 2023-03-31 | $8.8B | -$377.0M | $360.0M | -$737.0M | -8.3% |
| 2023-06-30 | $9.4B | $3.9B | $376.0M | $3.5B | 37.6% |
| 2023-09-30 | $9.4B | $8.2B | $401.0M | $7.8B | 83.6% |
| 2023-12-31 | $9.6B | $6.8B | $426.0M | $6.3B | 66.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 328.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 4.5% | 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 Decline
Operating cash flow was lower than both the prior quarter and the year-ago quarter, even as revenue increased. This decline drove the reduction in free cash flow and margin.
If operating cash flow remains at this lower level, free cash flow may continue to be pressured despite revenue growth.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow was lower than the prior quarter and the year-ago quarter, while capital expenditure was higher than the prior quarter but lower than the year-ago quarter. The resulting free cash flow and free cash flow margin both declined, indicating a weaker conversion of revenue into cash.
Compared with the immediately preceding quarter, revenue was higher but operating cash flow, free cash flow, and margin were all lower. Versus the same quarter one year earlier, revenue was higher while operating cash flow, free cash flow, and margin were also lower, with capital expenditure lower as well.
Monitor the trajectory of operating cash flow, as its decline was the primary factor behind the weakened free cash flow generation.