Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
In the current quarter, free cash flow turned positive compared to a negative level one year earlier, supported by a higher operating cash flow. However, free cash flow and margin declined from the preceding quarter due to lower operating cash flow and higher capital expenditure.
- Revenue was lower than both comparable periods, while operating cash flow was significantly higher than the year-ago quarter but lower than the preceding quarter. Capital expenditure was moderately higher than the preceding quarter but lower than the year-ago quarter. Free cash flow margin improved from negative to positive year over year but weakened sequentially.
- Compared to the preceding quarter, free cash flow and margin were lower, driven by a decrease in operating cash flow and a slight increase in capital expenditure. Compared to the same quarter one year earlier, all metrics improved substantially: operating cash flow and free cash flow turned positive, and margin shifted from negative to positive.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$7.1B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.4B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$2.2B
Cash generated by operations before capital spending.
CapEx
$704.0M
Capital spending and related asset purchases.
FCF margin
6.5%
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 |
|---|---|---|---|---|---|
| 2023-02-03 | $25.0B | $2.7B | $759.0M | $2.0B | 7.8% |
| 2023-05-05 | $20.9B | $1.8B | $701.0M | $1.1B | 5.1% |
| 2023-08-04 | $22.9B | $3.2B | $624.0M | $2.6B | 11.3% |
| 2023-11-03 | $22.3B | $2.2B | $704.0M | $1.4B | 6.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 137.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.2% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$18.3B | 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 recovery
Operating cash flow improved markedly from the prior year's quarter, enabling the company to generate positive free cash flow after a period of negative free cash flow.
This recovery was the primary factor behind the swing from negative to positive free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was lower than both comparable periods, while operating cash flow was significantly higher than the year-ago quarter but lower than the preceding quarter. Capital expenditure was moderately higher than the preceding quarter but lower than the year-ago quarter. Free cash flow margin improved from negative to positive year over year but weakened sequentially.
Compared to the preceding quarter, free cash flow and margin were lower, driven by a decrease in operating cash flow and a slight increase in capital expenditure. Compared to the same quarter one year earlier, all metrics improved substantially: operating cash flow and free cash flow turned positive, and margin shifted from negative to positive.
Monitor the sustainability of operating cash flow levels given the company's reliance on operating cash flows as its primary liquidity source, as noted in the filing.