Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow improved year-over-year but weakened sequentially as higher capital spending offset stable operating cash flow. The free cash flow margin followed a similar pattern, remaining above the prior-year level.
- Revenue was slightly higher than both the prior quarter and the year-ago quarter. Operating cash flow was unchanged from the prior quarter but higher than a year ago, while capital expenditure increased sequentially and year-over-year. Consequently, free cash flow and its margin decreased from the prior quarter but remained above the year-ago level.
- Compared with the immediately preceding quarter, free cash flow and margin were lower, driven by higher capital expenditure with operating cash flow unchanged. Versus the same quarter one year earlier, free cash flow and margin were higher, as operating cash flow improved more than the increase in capital expenditure.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$15.3B
Trailing twelve-month free cash flow.
Quarter free cash flow
$4.2B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$7.2B
Cash generated by operations before capital spending.
CapEx
$3.0B
Capital spending and related asset purchases.
FCF margin
13.9%
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 | $29.8B | $6.9B | $2.8B | $4.2B | 13.9% |
| 2022-12-31 | $30.6B | $5.9B | $3.6B | $2.3B | 7.6% |
| 2023-03-31 | $29.7B | $7.2B | $2.7B | $4.6B | 15.4% |
| 2023-06-30 | $30.5B | $7.2B | $3.0B | $4.2B | 13.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 99.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 9.7% | Lower capital intensity usually supports FCF margin. |
| Net cash | n/a | 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 Stability
Operating cash flow held steady versus the prior quarter and increased compared with the same quarter last year, providing a solid base for free cash flow generation.
This stability allowed free cash flow to remain above the prior-year level even as capital expenditure rose.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was slightly higher than both the prior quarter and the year-ago quarter. Operating cash flow was unchanged from the prior quarter but higher than a year ago, while capital expenditure increased sequentially and year-over-year. Consequently, free cash flow and its margin decreased from the prior quarter but remained above the year-ago level.
Compared with the immediately preceding quarter, free cash flow and margin were lower, driven by higher capital expenditure with operating cash flow unchanged. Versus the same quarter one year earlier, free cash flow and margin were higher, as operating cash flow improved more than the increase in capital expenditure.
Monitor the trajectory of capital expenditure, as its sequential increase contributed to the decline in free cash flow and margin.