Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow and margin were strong this quarter, driven by a substantial increase in operating cash flow. The performance improved significantly from the prior quarter and exceeded the year-ago level.
- Cash conversion was highly efficient, with operating cash flow surpassing revenue by a wide margin, resulting in a free cash flow margin well above typical levels. Capital expenditure remained relatively stable, further supporting conversion.
- Compared to the prior quarter, operating cash flow rose sharply while revenue edged lower, lifting the free cash flow margin from a very low level. Versus the same quarter a year ago, both revenue and operating cash flow increased, and the free cash flow margin improved.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$4.1B
Trailing twelve-month free cash flow.
Quarter free cash flow
$3.7B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$3.9B
Cash generated by operations before capital spending.
CapEx
$184.0M
Capital spending and related asset purchases.
FCF margin
109.4%
The share of revenue converted into free cash flow.
TTM FCF yield
n/a
TTM FCF divided by market capitalization.
FCF reconciliation
Free cash flow is not a GAAP line item; it should be bridged from the cash flow statement.
| Operating cash flow | $3.9B | Cash generated by operations before capital spending. |
| Capital expenditures | $184.0M | Capital spending used to bridge CFO to FCF. |
| Free cash flow | $3.7B | Operating cash flow less capital spending. |
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 | $3.2B | $1.6B | $159.0M | $1.5B | 46.2% |
| 2022-09-30 | $3.6B | -$997.0M | $170.0M | -$1.2B | -32.2% |
| 2022-12-31 | $2.6B | -$182.0M | $177.0M | -$359.0M | -13.7% |
| 2023-03-31 | $2.7B | $3.2B | $233.0M | $2.9B | 109.7% |
| 2023-06-30 | $3.4B | $1.1B | $223.0M | $923.0M | 27.5% |
| 2023-09-30 | $3.9B | -$1.4B | $213.0M | -$1.6B | -40.4% |
| 2023-12-31 | $2.9B | -$238.0M | $177.0M | -$415.0M | -14.4% |
| 2024-03-31 | $2.9B | $2.9B | $177.0M | $2.7B | 93.5% |
| 2024-06-30 | $3.6B | $1.5B | $194.0M | $1.3B | 36.7% |
| 2024-09-30 | $4.1B | -$1.5B | $194.0M | -$1.7B | -41.6% |
| 2024-12-31 | $3.2B | $198.0M | $191.0M | $7.0M | 0.2% |
| 2025-03-31 | $3.0B | $3.0B | $196.0M | $2.8B | 92.2% |
| 2025-06-30 | $3.8B | $1.1B | $200.0M | $921.0M | 24.3% |
| 2025-09-30 | $4.4B | -$497.0M | $189.0M | -$686.0M | -15.5% |
| 2025-12-31 | $3.5B | $304.0M | $185.0M | $119.0M | 3.4% |
| 2026-03-31 | $3.4B | $3.9B | $184.0M | $3.7B | 109.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -62450.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 5.4% | Lower capital intensity usually supports FCF margin. |
| Net cash | $1.1B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Strong Operating Cash Flow
Operating cash flow was the strongest observable driver, far exceeding revenue and capital expenditure combined, directly boosting free cash flow. The company also maintained a stable capital expenditure level.
This cash flow strength supports the company's liquidity and ability to pursue strategic initiatives, as noted in its liquidity and capital resources discussion.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Cash conversion was highly efficient, with operating cash flow surpassing revenue by a wide margin, resulting in a free cash flow margin well above typical levels. Capital expenditure remained relatively stable, further supporting conversion.
Compared to the prior quarter, operating cash flow rose sharply while revenue edged lower, lifting the free cash flow margin from a very low level. Versus the same quarter a year ago, both revenue and operating cash flow increased, and the free cash flow margin improved.
Monitor whether the elevated operating cash flow level can be sustained in the coming quarters, as it was the primary driver of the current quarter's exceptional cash generation.
Valuation context
A cash-flow page should show how much investors are paying for the cash stream, without turning into a full DCF.
| Market capitalization | n/a | Used as the denominator for FCF yield. |
| TTM FCF yield | n/a | TTM free cash flow divided by market capitalization. |
| EV / TTM FCF | n/a | A quick valuation bridge, not a full DCF. |
Peer context
Free cash flow quality is easier to read against related public companies.
Risks and tripwires
Observable signals that would weaken the free cash flow thesis.
| Risk | Tripwire | Why it matters |
|---|---|---|
| FCF margin compression | FCF margin falls for two consecutive quarters. | Cash conversion may be weakening before earnings show it. |
| Capital intensity rises | CapEx/revenue moves materially above the recent run rate. | More operating cash flow would be consumed before becoming FCF. |
| Working capital drag | Inventory or receivables grow faster than revenue. | Reported growth may not translate into cash. |