Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue increased from both the prior quarter and the same quarter one year earlier. However, operating cash flow declined year-over-year, resulting in a lower free cash flow margin compared to last year, though it improved sequentially.
- The company converted its revenue into operating cash flow, then invested in capital expenditures, yielding free cash flow. The free cash flow margin for this quarter was above the prior quarter but below the year-ago level.
- Compared to the prior quarter, revenue was higher, operating cash flow was stable, capital expenditure was lower, and free cash flow and margin improved. Compared to the same quarter one year earlier, revenue was higher, but operating cash flow and free cash flow were lower, leading to a weakened margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$4.4B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.3B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$2.5B
Cash generated by operations before capital spending.
CapEx
$1.1B
Capital spending and related asset purchases.
FCF margin
8.2%
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 |
|---|---|---|---|---|---|
| 2022-12-31 | $15.5B | $2.5B | $1.3B | $1.2B | 7.8% |
| 2023-03-31 | $15.6B | $1.8B | $1.2B | $606.0M | 3.9% |
| 2023-06-30 | $15.9B | $2.5B | $1.2B | $1.2B | 7.8% |
| 2023-09-30 | $16.2B | $2.5B | $1.1B | $1.3B | 8.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 123.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 7.1% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$38.5B | 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 Decline
Revenue rose compared to the same quarter one year earlier, but operating cash flow fell, causing the free cash flow margin to contract. The filing notes that for the nine-month period, operating cash flow increased due to positive working capital changes, but the quarterly figure shows a decline.
If operating cash flow does not recover, future free cash flow may remain under pressure.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
The company converted its revenue into operating cash flow, then invested in capital expenditures, yielding free cash flow. The free cash flow margin for this quarter was above the prior quarter but below the year-ago level.
Compared to the prior quarter, revenue was higher, operating cash flow was stable, capital expenditure was lower, and free cash flow and margin improved. Compared to the same quarter one year earlier, revenue was higher, but operating cash flow and free cash flow were lower, leading to a weakened margin.
The trend in working capital, which declined from year-end levels as noted in the filing, is a key metric to monitor for future cash flow generation.