Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow weakened sharply from the prior quarter as operating cash flow retreated from an elevated level, though both metrics remained significantly above the year-ago period. Free cash flow margin narrowed sequentially but stayed substantially higher than the same quarter last year.
- Revenue was stable compared to the prior quarter, yet operating cash flow declined substantially, resulting in a lower cash conversion rate. Capital expenditure increased modestly, and free cash flow followed the operating cash flow trend.
- Compared to the immediately preceding quarter, operating cash flow and free cash flow were markedly lower, with the margin also narrowing. Versus the same quarter one year earlier, both cash flows improved substantially and the margin widened considerably.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$12.1B
Trailing twelve-month free cash flow.
Quarter free cash flow
$2.9B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$3.2B
Cash generated by operations before capital spending.
CapEx
$264.0M
Capital spending and related asset purchases.
FCF margin
10.9%
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 | $22.8B | $8.5B | $288.0M | $8.2B | 35.8% |
| 2022-12-31 | $22.4B | -$5.1B | $275.0M | -$5.4B | -24.1% |
| 2023-03-31 | $26.7B | $6.7B | $223.0M | $6.5B | 24.2% |
| 2023-06-30 | $26.7B | $3.2B | $264.0M | $2.9B | 10.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 303.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.0% | Lower capital intensity usually supports FCF margin. |
| Net cash | $4.5B | 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 volatility
The strongest observable driver was the sharp reduction in operating cash flow from the prior quarter, which more than offset the slight increase in capital expenditure. Free cash flow declined in line with operating cash flow.
Future free cash flow will depend heavily on whether operating cash flow stabilizes or continues to moderate.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was stable compared to the prior quarter, yet operating cash flow declined substantially, resulting in a lower cash conversion rate. Capital expenditure increased modestly, and free cash flow followed the operating cash flow trend.
Compared to the immediately preceding quarter, operating cash flow and free cash flow were markedly lower, with the margin also narrowing. Versus the same quarter one year earlier, both cash flows improved substantially and the margin widened considerably.
Monitor the sustainability of operating cash flow after its significant sequential decline.