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 increased compared to the prior quarter and the same quarter last year. Free cash flow was stable versus the prior quarter but lower than a year ago, while the free cash flow margin weakened in both comparisons.
- Revenue rose while operating cash flow also increased, but capital expenditure grew more than operating cash flow, resulting in free cash flow that was unchanged from the prior quarter and lower than a year ago. The free cash flow margin declined from both the prior quarter and the same quarter last year.
- Compared to the prior quarter, revenue and operating cash flow were higher, capital expenditure was higher, free cash flow was stable, and the free cash flow margin was lower. Compared to the same quarter a year ago, revenue and operating cash flow were higher, capital expenditure was higher, free cash flow was lower, and the free cash flow margin was lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$806.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.2B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$2.6B
Cash generated by operations before capital spending.
CapEx
$1.5B
Capital spending and related asset purchases.
FCF margin
7.4%
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 |
|---|---|---|---|---|---|
| 2022-09-30 | $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% |
| 2023-06-30 | $15.6B | $2.6B | $1.5B | $1.2B | 7.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 63.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 9.3% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$16.0B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Capital Expenditure Growth
Capital expenditure increased from both the prior quarter and the same quarter a year ago, outpacing the growth in operating cash flow. This is the strongest observable driver of the decline in free cash flow and free cash flow margin.
Higher capital expenditure absorbed a larger share of operating cash flow, reducing free cash flow and margin despite higher revenue.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue rose while operating cash flow also increased, but capital expenditure grew more than operating cash flow, resulting in free cash flow that was unchanged from the prior quarter and lower than a year ago. The free cash flow margin declined from both the prior quarter and the same quarter last year.
Compared to the prior quarter, revenue and operating cash flow were higher, capital expenditure was higher, free cash flow was stable, and the free cash flow margin was lower. Compared to the same quarter a year ago, revenue and operating cash flow were higher, capital expenditure was higher, free cash flow was lower, and the free cash flow margin was lower.
Monitor the trend in capital expenditure relative to operating cash flow, as its faster growth is compressing free cash flow and margin.