Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue increased both sequentially and year-over-year, while free cash flow declined from the prior quarter but improved from the same quarter last year. The free cash flow margin weakened slightly compared to the year-ago period and more notably from the prior quarter.
- Operating cash flow relative to revenue weakened sequentially, as revenue grew while operating cash flow declined, but remained stable compared to the same quarter last year. Capital expenditure decreased sharply from the prior quarter, which partially offset the operating cash flow decline in free cash flow generation.
- Compared to the prior quarter, revenue was higher, but operating cash flow, free cash flow, and free cash flow margin were all lower, while capital expenditure was also lower. Compared to the same quarter last year, revenue, operating cash flow, free cash flow, and capital expenditure were all higher, with free cash flow margin slightly lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$17.7B
Trailing twelve-month free cash flow.
Quarter free cash flow
$5.3B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$5.9B
Cash generated by operations before capital spending.
CapEx
$591.0M
Capital spending and related asset purchases.
FCF margin
6.0%
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 | $81.2B | $9.1B | $580.0M | $8.5B | 10.5% |
| 2022-12-31 | $83.8B | -$2.0B | $688.0M | -$2.6B | -3.1% |
| 2023-03-31 | $85.3B | $7.4B | $984.0M | $6.5B | 7.6% |
| 2023-06-30 | $88.9B | $5.9B | $591.0M | $5.3B | 6.0% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 280.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.7% | 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.
Revenue Growth
Revenue increased sequentially and year-over-year. The filing notes that total revenues were driven by growth across all segments.
This revenue growth supported a higher free cash flow compared to the year-ago quarter, despite a lower free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow relative to revenue weakened sequentially, as revenue grew while operating cash flow declined, but remained stable compared to the same quarter last year. Capital expenditure decreased sharply from the prior quarter, which partially offset the operating cash flow decline in free cash flow generation.
Compared to the prior quarter, revenue was higher, but operating cash flow, free cash flow, and free cash flow margin were all lower, while capital expenditure was also lower. Compared to the same quarter last year, revenue, operating cash flow, free cash flow, and capital expenditure were all higher, with free cash flow margin slightly lower.
Monitor the level of capital expenditure in upcoming quarters, as it declined significantly from the prior quarter after being higher than the year-ago period.