Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was higher than both the prior quarter and the same quarter last year, but operating cash flow and free cash flow were substantially lower. The free cash flow margin weakened significantly.
- Operating cash flow declined relative to the prior quarter and the year-ago quarter, while capital expenditure was slightly lower. This resulted in a much weaker free cash flow margin compared to both periods.
- Compared with the immediately preceding quarter, revenue was higher but operating cash flow and free cash flow were lower, causing the margin to weaken. Versus the same quarter one year earlier, revenue was higher while operating cash flow, free cash flow, and margin were all lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$11.3B
Trailing twelve-month free cash flow.
Quarter free cash flow
$2.2B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$2.7B
Cash generated by operations before capital spending.
CapEx
$545.0M
Capital spending and related asset purchases.
FCF margin
2.4%
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 | $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% |
| 2023-09-30 | $89.8B | $2.7B | $545.0M | $2.2B | 2.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 96.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.6% | 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 was lower than both the prior quarter and the year-ago quarter, despite revenue being higher. This was the most observable factor behind the weakened free cash flow and margin.
Free cash flow weakened substantially because cash conversion from revenue decreased sharply.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow declined relative to the prior quarter and the year-ago quarter, while capital expenditure was slightly lower. This resulted in a much weaker free cash flow margin compared to both periods.
Compared with the immediately preceding quarter, revenue was higher but operating cash flow and free cash flow were lower, causing the margin to weaken. Versus the same quarter one year earlier, revenue was higher while operating cash flow, free cash flow, and margin were all lower.
Monitor the trend of operating cash flow in upcoming quarters, as it is the primary driver of free cash flow changes.