Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned positive this quarter, up from a negative figure in the prior quarter and significantly higher than the near-zero level a year ago. The free cash flow margin improved markedly, reflecting a stronger conversion of revenue into cash after capital spending.
- Revenue was lower than the prior quarter but higher than a year ago. Operating cash flow increased relative to both periods, while capital expenditure declined compared with both, leading to a positive free cash flow and a solid free cash flow margin.
- Compared with the prior quarter, free cash flow and free cash flow margin both improved, as operating cash flow rose and capital expenditure fell. Versus the same quarter a year ago, free cash flow moved from roughly break-even to a clearly positive level, with a higher margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.2B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.2B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$2.2B
Cash generated by operations before capital spending.
CapEx
$1.0B
Capital spending and related asset purchases.
FCF margin
9.7%
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 | $13.8B | $2.5B | $958.0M | $1.6B | 11.4% |
| 2022-09-30 | $14.0B | $869.0M | $1.4B | -$573.0M | -4.1% |
| 2022-12-31 | $13.4B | $1.2B | $2.2B | -$1.0B | -7.5% |
| 2023-03-31 | $12.8B | $2.2B | $1.0B | $1.2B | 9.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -340.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 7.8% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$17.1B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Free Cash Flow Turnaround
The quarter delivered a positive free cash flow margin after a negative margin in the prior period, supported by an increase in operating cash flow and a reduction in capital expenditure compared with both the prior quarter and the year-ago quarter.
The improved free cash flow strengthens the company's cash position relative to recent quarters.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was lower than the prior quarter but higher than a year ago. Operating cash flow increased relative to both periods, while capital expenditure declined compared with both, leading to a positive free cash flow and a solid free cash flow margin.
Compared with the prior quarter, free cash flow and free cash flow margin both improved, as operating cash flow rose and capital expenditure fell. Versus the same quarter a year ago, free cash flow moved from roughly break-even to a clearly positive level, with a higher margin.
Monitor whether the combination of higher operating cash flow and lower capital expenditure can be sustained in coming quarters.