Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow was materially higher versus the same quarter last year, driven by a substantial improvement in operating cash flow. Sequentially, free cash flow declined as revenue and operating cash flow decreased while capital expenditure rose.
- Revenue conversion into operating cash flow strengthened year over year, though the sequential decline in operating cash flow relative to lower revenue points to a weaker conversion rate in the current quarter. Capital expenditure increased from the prior quarter, partly offsetting the cash generation.
- Compared to the preceding quarter, free cash flow margin was lower as revenue and operating cash flow both fell and capital expenditure rose. Versus the same quarter one year ago, free cash flow margin improved substantially due to a higher operating cash flow and unchanged capital expenditure despite slightly lower revenue.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$17.6B
Trailing twelve-month free cash flow.
Quarter free cash flow
$3.6B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$6.8B
Cash generated by operations before capital spending.
CapEx
$3.2B
Capital spending and related asset purchases.
FCF margin
8.7%
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 |
|---|---|---|---|---|---|
| 2025-03-31 | $39.9B | $6.1B | $1.8B | $4.2B | 10.6% |
| 2025-06-30 | $42.9B | $6.9B | $2.1B | $4.8B | 11.1% |
| 2025-09-30 | $44.3B | $7.1B | $2.1B | $5.0B | 11.2% |
| 2025-12-31 | $41.0B | $6.8B | $3.2B | $3.6B | 8.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -108.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 7.9% | 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.
Year-over-year operating cash flow strength
Operating cash flow was significantly higher than the same quarter last year, more than compensating for the slight revenue decline and stable capital expenditure. This was the primary factor behind the year-over-year free cash flow improvement.
The higher operating cash flow drove free cash flow margin to a level substantially above the prior-year quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue conversion into operating cash flow strengthened year over year, though the sequential decline in operating cash flow relative to lower revenue points to a weaker conversion rate in the current quarter. Capital expenditure increased from the prior quarter, partly offsetting the cash generation.
Compared to the preceding quarter, free cash flow margin was lower as revenue and operating cash flow both fell and capital expenditure rose. Versus the same quarter one year ago, free cash flow margin improved substantially due to a higher operating cash flow and unchanged capital expenditure despite slightly lower revenue.
Monitor the trend in capital expenditure, which increased sequentially and may pressure future free cash flow if revenue or operating cash flow do not keep pace.