Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned negative as operating cash flow declined while capital expenditure increased compared to both the prior quarter and the same quarter last year. Revenue was slightly lower than both comparative periods.
- Operating cash flow was insufficient to cover capital expenditure, resulting in a narrowly negative free cash flow margin. The gap widened from the prior quarter's ample positive margin and from the year-ago quarter's positive margin.
- Compared to the preceding quarter, revenue was slightly lower, operating cash flow decreased significantly, capital expenditure was higher, and free cash flow shifted from positive to negative. Versus the same quarter a year ago, revenue was slightly lower, operating cash flow was lower, capital expenditure was higher, and free cash flow moved from positive to negative.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$10.0B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$49.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$3.7B
Cash generated by operations before capital spending.
CapEx
$3.7B
Capital spending and related asset purchases.
FCF margin
-0.1%
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 | $36.6B | $3.1B | $2.4B | $655.0M | 1.8% |
| 2023-06-30 | $41.3B | $7.6B | $2.3B | $5.3B | 12.9% |
| 2023-09-30 | $40.5B | $6.6B | $2.6B | $4.0B | 9.9% |
| 2023-12-31 | $39.3B | $3.7B | $3.7B | -$49.0M | -0.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -2.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 9.4% | 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.
Capital expenditure outpacing cash from operations
Capital expenditure increased relative to both the prior quarter and the year-ago quarter, while operating cash flow decreased. This combination drove free cash flow into negative territory.
The negative free cash flow margin indicates that cash generation from operations did not cover investment spending in the period.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow was insufficient to cover capital expenditure, resulting in a narrowly negative free cash flow margin. The gap widened from the prior quarter's ample positive margin and from the year-ago quarter's positive margin.
Compared to the preceding quarter, revenue was slightly lower, operating cash flow decreased significantly, capital expenditure was higher, and free cash flow shifted from positive to negative. Versus the same quarter a year ago, revenue was slightly lower, operating cash flow was lower, capital expenditure was higher, and free cash flow moved from positive to negative.
Monitor the trajectory of operating cash flow given its sharp decline this quarter.