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 positive from a deficit in the prior quarter, though it was slightly lower than the same quarter last year. The cash conversion margin improved significantly from negative to positive, but remained below the year-ago level.
- Revenue was higher than both the prior quarter and the year-ago quarter. Operating cash flow increased substantially from the prior quarter and was slightly lower than the year-ago quarter. Capital expenditure was higher than both periods. As a result, free cash flow improved from negative to positive sequentially, but was slightly lower than the year-ago quarter, with a margin that improved from negative to positive but was lower than the year-ago quarter.
- Compared to the immediately preceding quarter, revenue, operating cash flow, and free cash flow all improved, with free cash flow turning from a deficit to a surplus. Compared to the same quarter one year earlier, revenue was higher, but operating cash flow and free cash flow were slightly lower, and the free cash flow margin was lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$4.4B
Trailing twelve-month free cash flow.
Quarter free cash flow
$3.0B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$3.4B
Cash generated by operations before capital spending.
CapEx
$431.0M
Capital spending and related asset purchases.
FCF margin
13.4%
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 | $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% |
| 2023-12-31 | $22.0B | $3.4B | $431.0M | $3.0B | 13.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -12826.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.0% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$39.4B | 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 surge
Operating cash flow in the current quarter was substantially higher than the prior quarter, turning from a minimal level to a sizable positive figure. This was the strongest observable driver of the free cash flow turnaround.
The surge in operating cash flow enabled the company to generate positive free cash flow after a negative result in the prior quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher than both the prior quarter and the year-ago quarter. Operating cash flow increased substantially from the prior quarter and was slightly lower than the year-ago quarter. Capital expenditure was higher than both periods. As a result, free cash flow improved from negative to positive sequentially, but was slightly lower than the year-ago quarter, with a margin that improved from negative to positive but was lower than the year-ago quarter.
Compared to the immediately preceding quarter, revenue, operating cash flow, and free cash flow all improved, with free cash flow turning from a deficit to a surplus. Compared to the same quarter one year earlier, revenue was higher, but operating cash flow and free cash flow were slightly lower, and the free cash flow margin was lower.
Monitor the trajectory of advances and progress billings and payments related to the 737 MAX program, as the filing indicated these were significant factors in the full-year operating cash flow improvement.