Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow improved sharply from the prior quarter as operating cash flow rose while capital expenditure increased by a smaller amount. Compared to the same quarter last year, free cash flow was lower despite similar revenue, reflecting higher capital expenditure.
- Revenue was stable sequentially and year-over-year. Operating cash flow improved versus the prior quarter, but capital expenditure also increased, yielding a higher free cash flow margin than the preceding quarter. The conversion from revenue to free cash flow was weaker than the same quarter one year earlier due to a larger share of revenue being reinvested as capital expenditure.
- Compared to the immediately preceding quarter, free cash flow and free cash flow margin improved significantly, driven by higher operating cash flow. Versus the same quarter one year earlier, free cash flow and free cash flow margin weakened, as capital expenditure was substantially higher while revenue and operating cash flow were roughly stable.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$3.2B
Trailing twelve-month free cash flow.
Quarter free cash flow
$983.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$3.9B
Cash generated by operations before capital spending.
CapEx
$3.0B
Capital spending and related asset purchases.
FCF margin
7.2%
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 | $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% |
| 2023-09-30 | $13.6B | $3.9B | $3.0B | $983.0M | 7.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 78.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 21.8% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$97.2B | 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 Improvement
Operating cash flow increased from the prior quarter, providing a stronger base for free cash flow generation despite the higher capital expenditure. This sequential improvement was the most observable positive driver.
The rise in operating cash flow was the strongest driver of the sequential free cash flow improvement.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was stable sequentially and year-over-year. Operating cash flow improved versus the prior quarter, but capital expenditure also increased, yielding a higher free cash flow margin than the preceding quarter. The conversion from revenue to free cash flow was weaker than the same quarter one year earlier due to a larger share of revenue being reinvested as capital expenditure.
Compared to the immediately preceding quarter, free cash flow and free cash flow margin improved significantly, driven by higher operating cash flow. Versus the same quarter one year earlier, free cash flow and free cash flow margin weakened, as capital expenditure was substantially higher while revenue and operating cash flow were roughly stable.
Monitor the trajectory of capital expenditure, which was the primary factor behind the year-over-year decline in free cash flow.