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 but slightly higher compared to the same quarter one year earlier. Free cash flow and free cash flow margin weakened due to higher capital expenditure, while operating cash flow remained level with the prior quarter and was lower than the year-ago quarter.
- Operating cash flow was unchanged from the prior quarter, but a larger capital expenditure reduced free cash flow, causing the free cash flow margin to narrow. Compared to a year ago, both operating cash flow and free cash flow margin were lower.
- Revenue was essentially stable sequentially and slightly higher year-over-year. Free cash flow and free cash flow margin declined both sequentially and year-over-year, with the year-over-year decline being more pronounced.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$3.6B
Trailing twelve-month free cash flow.
Quarter free cash flow
$477.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$3.3B
Cash generated by operations before capital spending.
CapEx
$2.8B
Capital spending and related asset purchases.
FCF margin
3.5%
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 |
|---|---|---|---|---|---|
| 2022-09-30 | $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% |
| 2023-06-30 | $13.7B | $3.3B | $2.8B | $477.0M | 3.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 45.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 20.7% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$97.5B | 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
Capital expenditure was higher than both the immediately preceding quarter and the same quarter one year earlier. This reduced free cash flow and free cash flow margin despite stable revenue and operating cash flow.
Higher capital expenditure was the strongest observable driver of the weakened free cash flow conversion.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow was unchanged from the prior quarter, but a larger capital expenditure reduced free cash flow, causing the free cash flow margin to narrow. Compared to a year ago, both operating cash flow and free cash flow margin were lower.
Revenue was essentially stable sequentially and slightly higher year-over-year. Free cash flow and free cash flow margin declined both sequentially and year-over-year, with the year-over-year decline being more pronounced.
Monitor capital expenditure, as its increase was the primary observable factor relative to the prior quarter.