Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
In the final quarter of fiscal 2023, the company generated free cash flow with a margin that improved sequentially but declined compared to the same quarter a year earlier. Revenue remained stable from the prior quarter, while operating cash flow rose, leading to an increase in free cash flow.
- Revenue was unchanged from the prior quarter, but operating cash flow grew, resulting in stronger free cash flow and a higher margin. Capital expenditure increased relative to both the prior quarter and the year‑ago quarter.
- Sequentially, free cash flow and margin improved as operating cash flow increased while revenue held steady. Year over year, all metrics weakened: revenue was lower, operating cash flow decreased, and both free cash flow and margin declined, despite a slight increase in capital expenditure.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$7.4B
Trailing twelve-month free cash flow.
Quarter free cash flow
$2.0B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$2.2B
Cash generated by operations before capital spending.
CapEx
$215.0M
Capital spending and related asset purchases.
FCF margin
27.5%
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 |
|---|---|---|---|---|---|
| 2023-03-31 | $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% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 136.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.0% | 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 Change
Operating cash flow rose sequentially, driving an improvement in free cash flow margin. However, compared to the same quarter last year, operating cash flow was lower, as noted in the filing due to higher income tax payments and increased operating spend including an HIV antitrust litigation settlement.
The sequential improvement strengthened near‑term cash generation, but the year‑over‑year decline warrants attention to sustainability.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was unchanged from the prior quarter, but operating cash flow grew, resulting in stronger free cash flow and a higher margin. Capital expenditure increased relative to both the prior quarter and the year‑ago quarter.
Sequentially, free cash flow and margin improved as operating cash flow increased while revenue held steady. Year over year, all metrics weakened: revenue was lower, operating cash flow decreased, and both free cash flow and margin declined, despite a slight increase in capital expenditure.
Monitor the trajectory of operating cash flow given the year‑over‑year decline and the impact of higher income tax payments and operating expenses cited in the filing.