Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue increased from the prior quarter and the year-ago quarter, while free cash flow was lower than the prior quarter but higher than the year-ago quarter. The free cash flow margin weakened sequentially but improved compared to the same quarter last year.
- Operating cash flow was lower than the prior quarter but stable compared to the year-ago quarter. Capital expenditure was unchanged from the prior quarter and slightly lower than the year-ago quarter, resulting in free cash flow that was lower sequentially but higher year over year.
- Compared to the prior quarter, revenue was higher but operating cash flow and free cash flow were lower, leading to a weakened free cash flow margin. Compared to the same quarter one year earlier, revenue was higher, operating cash flow was stable, and free cash flow was higher, resulting in an improved free cash flow margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$16.3B
Trailing twelve-month free cash flow.
Quarter free cash flow
$2.6B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$5.9B
Cash generated by operations before capital spending.
CapEx
$3.3B
Capital spending and related asset purchases.
FCF margin
8.3%
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 |
|---|---|---|---|---|---|
| 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% |
| 2023-09-30 | $30.1B | $8.2B | $3.3B | $4.9B | 16.1% |
| 2023-12-31 | $31.3B | $5.9B | $3.3B | $2.6B | 8.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 79.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 10.6% | 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 Decline
Operating cash flow decreased from the prior quarter while revenue increased, indicating a weaker cash conversion rate. This was the strongest observable driver of the sequential decline in free cash flow.
The lower operating cash flow reduced free cash flow despite stable capital expenditure, resulting in a weakened free cash flow margin compared to the prior quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow was lower than the prior quarter but stable compared to the year-ago quarter. Capital expenditure was unchanged from the prior quarter and slightly lower than the year-ago quarter, resulting in free cash flow that was lower sequentially but higher year over year.
Compared to the prior quarter, revenue was higher but operating cash flow and free cash flow were lower, leading to a weakened free cash flow margin. Compared to the same quarter one year earlier, revenue was higher, operating cash flow was stable, and free cash flow was higher, resulting in an improved free cash flow margin.
Monitor the relationship between operating cash flow and capital expenditure, as the sequential decline in free cash flow was driven entirely by lower operating cash flow while capital expenditure remained unchanged.