Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned positive and improved significantly compared to both the prior quarter and the same quarter last year. The improvement was driven by higher operating cash flow and a lower capital expenditure relative to revenue.
- Revenue increased while operating cash flow rose substantially, leading to a higher free cash flow margin. Capital expenditure was lower than the prior quarter but higher than a year ago, yet free cash flow still improved due to stronger cash generation from operations.
- Compared to the prior quarter, free cash flow and free cash flow margin both improved, with operating cash flow higher and capital expenditure lower. Versus the same quarter last year, free cash flow turned from negative to positive, driven by a much higher operating cash flow despite a modest increase in capital expenditure.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$3.9B
Trailing twelve-month free cash flow.
Quarter free cash flow
$2.3B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$3.2B
Cash generated by operations before capital spending.
CapEx
$890.0M
Capital spending and related asset purchases.
FCF margin
4.2%
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 |
|---|---|---|---|---|---|
| 2022-02-13 | $51.9B | $401.0M | $723.0M | -$322.0M | -0.6% |
| 2022-05-08 | $52.6B | $1.2B | $854.0M | $373.0M | 0.7% |
| 2022-11-20 | $54.4B | $2.6B | $1.1B | $1.6B | 2.9% |
| 2023-02-12 | $55.3B | $3.2B | $890.0M | $2.3B | 4.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 157.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.6% | Lower capital intensity usually supports FCF margin. |
| Net cash | $6.4B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Stronger Operating Cash Flow
Operating cash flow increased significantly from both the prior quarter and the same quarter last year, providing the primary lift to free cash flow. This improvement occurred alongside higher revenue.
The stronger operating cash flow was the main factor behind the positive swing in free cash flow and the expansion of free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased while operating cash flow rose substantially, leading to a higher free cash flow margin. Capital expenditure was lower than the prior quarter but higher than a year ago, yet free cash flow still improved due to stronger cash generation from operations.
Compared to the prior quarter, free cash flow and free cash flow margin both improved, with operating cash flow higher and capital expenditure lower. Versus the same quarter last year, free cash flow turned from negative to positive, driven by a much higher operating cash flow despite a modest increase in capital expenditure.
Monitor the trend in capital expenditure relative to revenue, as it decreased this quarter but remains a key use of cash.