Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
In the quarter ended December 31, 2023, Chevron generated free cash flow that was higher than the preceding quarter but lower than the same quarter a year earlier. The free cash flow margin improved compared to both the prior quarter and the prior year quarter.
- Revenue declined from the prior quarter and the year-ago quarter, yet operating cash flow increased sequentially, leading to a higher free cash flow margin. Capital expenditure decreased from the prior quarter but was above the year-ago level.
- Free cash flow and margin were higher than the immediately preceding quarter, supported by increased operating cash flow and reduced capital spending. Relative to the same quarter one year earlier, free cash flow was slightly lower despite a higher margin, as revenue and operating cash flow were both lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$19.8B
Trailing twelve-month free cash flow.
Quarter free cash flow
$8.1B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$12.4B
Cash generated by operations before capital spending.
CapEx
$4.4B
Capital spending and related asset purchases.
FCF margin
16.5%
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 |
|---|---|---|---|---|---|
| 2023-03-31 | $48.8B | $7.2B | $3.0B | $4.2B | 8.5% |
| 2023-06-30 | $47.2B | $6.3B | $3.8B | $2.5B | 5.4% |
| 2023-09-30 | $51.9B | $9.7B | $4.7B | $5.0B | 9.6% |
| 2023-12-31 | $48.9B | $12.4B | $4.4B | $8.1B | 16.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 357.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 8.9% | 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.
Sequential Cash Flow Improvement
Operating cash flow was higher than the prior quarter despite a decline in revenue, and capital expenditure was lower, driving a stronger free cash flow margin.
This improvement in cash conversion provided a more robust free cash flow result compared to the prior quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue declined from the prior quarter and the year-ago quarter, yet operating cash flow increased sequentially, leading to a higher free cash flow margin. Capital expenditure decreased from the prior quarter but was above the year-ago level.
Free cash flow and margin were higher than the immediately preceding quarter, supported by increased operating cash flow and reduced capital spending. Relative to the same quarter one year earlier, free cash flow was slightly lower despite a higher margin, as revenue and operating cash flow were both lower.
Monitor the company's capital allocation strategy, including its authorized stock repurchase program as noted in the filing.