Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was stable versus the prior quarter, while operating cash flow weakened and capital expenditure decreased. Free cash flow was slightly lower compared to the prior quarter and significantly lower versus the same quarter one year earlier, with the free cash flow margin narrowing from the year-ago level.
- Operating cash flow as a proportion of revenue weakened from the prior quarter and decreased from the year-ago quarter. With higher capital expenditure than the prior quarter but lower than a year ago, free cash flow margin was stable sequentially but declined sharply year over year.
- Compared to the immediately preceding quarter, revenue was stable, operating cash flow was lower, and free cash flow was slightly lower. Compared to the same quarter one year earlier, revenue was higher, operating cash flow was lower, and free cash flow was substantially lower.
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
$859.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$3.3B
Cash generated by operations before capital spending.
CapEx
$2.5B
Capital spending and related asset purchases.
FCF margin
6.3%
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 | $13.6B | $3.7B | $2.2B | $1.5B | 11.3% |
| 2022-09-30 | $13.6B | $3.8B | $2.4B | $1.4B | 10.0% |
| 2022-12-31 | $13.7B | $3.8B | $2.9B | $867.0M | 6.3% |
| 2023-03-31 | $13.7B | $3.3B | $2.5B | $859.0M | 6.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 72.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 18.0% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$97.4B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Capital expenditure increase relative to operating cash flow
Capital expenditure increased compared to the prior quarter while operating cash flow decreased, leading to a higher capex-to-OCF ratio. This was the strongest observable driver of the change in free cash flow.
The elevated capital spending relative to operating cash flow absorbed a larger share of cash generation, constraining free cash flow.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a proportion of revenue weakened from the prior quarter and decreased from the year-ago quarter. With higher capital expenditure than the prior quarter but lower than a year ago, free cash flow margin was stable sequentially but declined sharply year over year.
Compared to the immediately preceding quarter, revenue was stable, operating cash flow was lower, and free cash flow was slightly lower. Compared to the same quarter one year earlier, revenue was higher, operating cash flow was lower, and free cash flow was substantially lower.
Monitor the trend in capital expenditure relative to operating cash flow, as the ratio of capex to operating cash flow has increased compared to both the prior quarter and the year-ago quarter.