Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
In the current quarter, free cash flow turned negative as operating cash flow dropped sharply while capital expenditure rose slightly, resulting in a negative free cash flow margin. Sequentially, all key cash flow metrics weakened, and compared to the same quarter last year, operating cash flow and free cash flow were significantly lower despite higher revenue.
- Revenue was higher than a year earlier but operating cash flow was much lower, and capital expenditure increased, leading to negative free cash flow and a worsened margin.
- Compared to the prior quarter, revenue was lower, operating cash flow fell substantially, and free cash flow shifted from positive to negative. Year-over-year, revenue improved but operating cash flow and free cash flow declined sharply.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$4.6B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$310.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$22.0M
Cash generated by operations before capital spending.
CapEx
$332.0M
Capital spending and related asset purchases.
FCF margin
-1.7%
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 | $20.0B | $3.5B | $326.0M | $3.1B | 15.7% |
| 2023-03-31 | $17.9B | -$318.0M | $468.0M | -$786.0M | -4.4% |
| 2023-06-30 | $19.8B | $2.9B | $296.0M | $2.6B | 13.1% |
| 2023-09-30 | $18.1B | $22.0M | $332.0M | -$310.0M | -1.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 18.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.8% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$45.2B | 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 Decline
Operating cash flow decreased dramatically from both the prior quarter and the same quarter last year, far outweighing the relatively stable capital expenditure.
The sharp reduction in operating cash flow was the primary factor behind the negative free cash flow.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher than a year earlier but operating cash flow was much lower, and capital expenditure increased, leading to negative free cash flow and a worsened margin.
Compared to the prior quarter, revenue was lower, operating cash flow fell substantially, and free cash flow shifted from positive to negative. Year-over-year, revenue improved but operating cash flow and free cash flow declined sharply.
Monitor whether operating cash flow can improve toward prior levels.