Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue and operating cash flow rose sharply from both the prior quarter and the year-ago period, leading to a substantial improvement in free cash flow and margin. The company's cash conversion strengthened notably, with free cash flow outpacing the growth in capital expenditure.
- Operating cash flow increased significantly relative to revenue, while capital expenditure remained roughly stable, resulting in a higher free cash flow margin. The conversion of revenue into free cash flow improved versus the preceding quarter and the same quarter last year.
- Compared to the immediately preceding quarter, all key metrics improved: revenue, operating cash flow, free cash flow, and margin were higher. Versus the year-ago quarter, the same pattern held, with free cash flow and margin showing a marked increase.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$11.4B
Trailing twelve-month free cash flow.
Quarter free cash flow
$5.3B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$7.6B
Cash generated by operations before capital spending.
CapEx
$2.3B
Capital spending and related asset purchases.
FCF margin
12.9%
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 |
|---|---|---|---|---|---|
| 2022-09-30 | $38.7B | $5.2B | $2.1B | $3.1B | 8.0% |
| 2022-12-31 | $39.8B | $5.6B | $3.3B | $2.3B | 5.8% |
| 2023-03-31 | $36.6B | $3.1B | $2.4B | $655.0M | 1.8% |
| 2023-06-30 | $41.3B | $7.6B | $2.3B | $5.3B | 12.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 204.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 5.5% | 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 Surge
The increase in operating cash flow was the most significant driver of the higher free cash flow, as revenue grew and capital expenditure remained similar. This drove a substantial improvement in free cash flow and margin, strengthening the company's cash generation profile.
The surge in operating cash flow directly enabled a much higher free cash flow and margin compared to both prior periods.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow increased significantly relative to revenue, while capital expenditure remained roughly stable, resulting in a higher free cash flow margin. The conversion of revenue into free cash flow improved versus the preceding quarter and the same quarter last year.
Compared to the immediately preceding quarter, all key metrics improved: revenue, operating cash flow, free cash flow, and margin were higher. Versus the year-ago quarter, the same pattern held, with free cash flow and margin showing a marked increase.
Monitor whether the elevated operating cash flow level can be maintained, given the prior quarter's much lower figure.