Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
For the first quarter of fiscal 2026, Gilead's cash conversion was robust: revenue and operating cash flow rose compared to the same quarter last year, driving free cash flow and margin sharply higher. However, relative to the prior quarter, revenue, operating cash flow, free cash flow and margin all weakened.
- Operating cash flow, the primary source of free cash flow, increased significantly year over year while capital expenditure rose only modestly, leading to a higher free cash flow margin. Sequentially, a decline in operating cash flow exceeded the drop in capital expenditure, resulting in a lower free cash flow margin.
- Compared with the immediately preceding quarter, revenue, operating cash flow, free cash flow, and margin all decreased. Versus the same quarter one year earlier, revenue, operating cash flow, free cash flow, and margin all improved markedly.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$10.2B
Trailing twelve-month free cash flow.
Quarter free cash flow
$2.4B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$2.5B
Cash generated by operations before capital spending.
CapEx
$117.0M
Capital spending and related asset purchases.
FCF margin
34.9%
The share of revenue converted into free cash flow.
TTM FCF yield
6.2%
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 | $2.5B | Cash generated by operations before capital spending. |
| Capital expenditures | $117.0M | Capital spending used to bridge CFO to FCF. |
| Free cash flow | $2.4B | 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 | $6.3B | $1.8B | $143.0M | $1.7B | 26.5% |
| 2022-09-30 | $7.0B | $2.9B | $157.0M | $2.7B | 38.4% |
| 2022-12-31 | $7.4B | $2.6B | $181.0M | $2.4B | 32.3% |
| 2023-03-31 | $6.4B | $1.7B | $109.0M | $1.6B | 25.7% |
| 2023-06-30 | $6.6B | $2.3B | $139.0M | $2.2B | 33.3% |
| 2023-09-30 | $7.1B | $1.8B | $122.0M | $1.6B | 23.2% |
| 2023-12-31 | $7.1B | $2.2B | $215.0M | $2.0B | 27.5% |
| 2024-03-31 | $6.7B | $2.2B | $105.0M | $2.1B | 31.6% |
| 2024-06-30 | $7.0B | $1.3B | $130.0M | $1.2B | 17.2% |
| 2024-09-30 | $7.5B | $4.3B | $141.0M | $4.2B | 55.2% |
| 2024-12-31 | $7.6B | $3.0B | $147.0M | $2.8B | 37.4% |
| 2025-03-31 | $6.7B | $1.8B | $104.0M | $1.7B | 24.8% |
| 2025-06-30 | $7.1B | $827.0M | $107.0M | $720.0M | 10.2% |
| 2025-09-30 | $7.8B | $4.1B | $147.0M | $4.0B | 51.0% |
| 2025-12-31 | $7.9B | $3.3B | $205.0M | $3.1B | 39.4% |
| 2026-03-31 | $7.0B | $2.5B | $117.0M | $2.4B | 34.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 120.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.7% | Lower capital intensity usually supports FCF margin. |
| Net cash | n/a | 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 Strength
Operating cash flow was the strongest observable driver, rising sharply year over year despite a sequential decline. The year-over-year increase was the primary factor behind the growth in free cash flow.
The year-over-year improvement in operating cash flow substantially lifted free cash flow and margin, reinforcing the company's cash generation capacity.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow, the primary source of free cash flow, increased significantly year over year while capital expenditure rose only modestly, leading to a higher free cash flow margin. Sequentially, a decline in operating cash flow exceeded the drop in capital expenditure, resulting in a lower free cash flow margin.
Compared with the immediately preceding quarter, revenue, operating cash flow, free cash flow, and margin all decreased. Versus the same quarter one year earlier, revenue, operating cash flow, free cash flow, and margin all improved markedly.
Monitor the trajectory of capital expenditure, which declined sequentially and may signal shifts in investment intensity.
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 | $163.9B | Used as the denominator for FCF yield. |
| TTM FCF yield | 6.2% | 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. |