Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Cash conversion weakened sequentially as operating cash flow fell while capital spending remained elevated, resulting in negative free cash flow. Compared to the same quarter last year, free cash flow improved as operating cash flow increased and capital expenditure was slightly lower.
- Revenue was stable sequentially, but operating cash flow decreased substantially, leading to a negative free cash flow margin. Capital expenditure was lower than the prior quarter but still exceeded operating cash flow.
- Compared to the prior quarter, free cash flow turned from positive to negative due to lower operating cash flow and slightly lower capital expenditure. Versus the same quarter last year, free cash flow improved as operating cash flow increased and capital expenditure was slightly lower.
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
-$193.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.1B
Cash generated by operations before capital spending.
CapEx
$1.3B
Capital spending and related asset purchases.
FCF margin
-1.2%
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 | $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% |
| 2023-09-30 | $15.5B | $1.1B | $1.3B | -$193.0M | -1.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -17.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 8.2% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$15.2B | 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 decreased significantly from the prior quarter, while revenue remained nearly flat. This was the primary factor behind the swing to negative free cash flow.
The decline in operating cash flow reversed the positive free cash flow seen in the previous quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was stable sequentially, but operating cash flow decreased substantially, leading to a negative free cash flow margin. Capital expenditure was lower than the prior quarter but still exceeded operating cash flow.
Compared to the prior quarter, free cash flow turned from positive to negative due to lower operating cash flow and slightly lower capital expenditure. Versus the same quarter last year, free cash flow improved as operating cash flow increased and capital expenditure was slightly lower.
Monitor the relationship between operating cash flow and capital expenditure, as the current quarter's operating cash flow was insufficient to cover capital spending.