Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue grew modestly from the prior quarter and year-ago quarter, but operating cash flow declined sharply, driving free cash flow lower. Free cash flow margin weakened significantly compared to both periods.
- Operating cash flow was substantially lower than the prior quarter and year-ago quarter, while capital expenditure also decreased. As a result, free cash flow and its margin declined.
- Compared to the immediately preceding quarter, free cash flow and margin worsened. Year-over-year, both metrics also weakened as operating cash flow dropped despite higher revenue.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$5.5B
Trailing twelve-month free cash flow.
Quarter free cash flow
$885.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.0B
Cash generated by operations before capital spending.
CapEx
$136.0M
Capital spending and related asset purchases.
FCF margin
2.5%
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 |
|---|---|---|---|---|---|
| 2022-12-31 | $33.6B | -$1.6B | $233.0M | -$1.8B | -5.4% |
| 2023-03-31 | $35.0B | $4.3B | $225.0M | $4.0B | 11.6% |
| 2023-06-30 | $34.8B | $2.5B | $215.0M | $2.3B | 6.7% |
| 2023-09-30 | $35.0B | $1.0B | $136.0M | $885.0M | 2.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 188.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.4% | Lower capital intensity usually supports FCF margin. |
| Net cash | $189.0M | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Decline in Operating Cash Flow
Operating cash flow fell compared to both the prior quarter and the same quarter last year, despite a slight increase in revenue. This was the primary factor behind the lower free cash flow and margin.
The reduction in operating cash flow outweighed the benefit from lower capital expenditure, resulting in a material decline in free cash flow.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow was substantially lower than the prior quarter and year-ago quarter, while capital expenditure also decreased. As a result, free cash flow and its margin declined.
Compared to the immediately preceding quarter, free cash flow and margin worsened. Year-over-year, both metrics also weakened as operating cash flow dropped despite higher revenue.
Monitor whether operating cash flow improves in coming quarters to support free cash flow generation.