Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue and operating cash flow both decreased from the prior quarter and the year-ago quarter, leading to a lower free cash flow margin. The company's cash conversion weakened as a result of the decline in operating cash flow relative to revenue.
- Cash conversion, measured by operating cash flow relative to revenue, weakened compared to the immediately preceding quarter and the same quarter one year earlier.
- Both operating cash flow and free cash flow were lower than the prior quarter and the year-ago quarter, while capital expenditure was higher than the year-ago quarter but lower than the prior quarter.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$35.7B
Trailing twelve-month free cash flow.
Quarter free cash flow
$4.2B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$7.2B
Cash generated by operations before capital spending.
CapEx
$3.0B
Capital spending and related asset purchases.
FCF margin
8.5%
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 |
|---|---|---|---|---|---|
| 2022-06-30 | $65.4B | $13.8B | $3.2B | $10.6B | 16.2% |
| 2022-09-30 | $63.5B | $15.3B | $3.0B | $12.3B | 19.3% |
| 2022-12-31 | $54.5B | $12.5B | $3.8B | $8.7B | 15.9% |
| 2023-03-31 | $48.8B | $7.2B | $3.0B | $4.2B | 8.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 63.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 6.2% | 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.
Weaker Operating Cash Flow
Operating cash flow decreased from both the prior quarter and the year-ago quarter, which was the primary factor behind the reduction in free cash flow.
This weakened the overall free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Cash conversion, measured by operating cash flow relative to revenue, weakened compared to the immediately preceding quarter and the same quarter one year earlier.
Both operating cash flow and free cash flow were lower than the prior quarter and the year-ago quarter, while capital expenditure was higher than the year-ago quarter but lower than the prior quarter.
Monitor the trend in capital expenditure as it increased from the year-ago period while operating cash flow declined.