Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow and margin fell sharply from both the prior quarter and the year-ago quarter. Revenue was little changed sequentially but higher year over year, while operating cash flow declined steeply.
- Cash conversion weakened as operating cash flow declined relative to revenue, while capital expenditure was slightly lower. The resulting free cash flow margin contracted meaningfully.
- Compared to the prior quarter, free cash flow and operating cash flow were both lower, while revenue was roughly stable. Versus the same quarter last year, free cash flow dropped substantially despite higher revenue.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$5.0B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.0B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.3B
Cash generated by operations before capital spending.
CapEx
$234.0M
Capital spending and related asset purchases.
FCF margin
3.9%
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 |
|---|---|---|---|---|---|
| 2022-12-31 | $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% |
| 2023-09-30 | $26.4B | $1.3B | $234.0M | $1.0B | 3.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 122.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.9% | Lower capital intensity usually supports FCF margin. |
| Net cash | $3.4B | 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 Weakness
Operating cash flow fell significantly from both the prior quarter and the year-ago quarter, while revenue was relatively stable. This divergence drove the contraction in free cash flow and margin.
If operating cash flow does not recover, free cash flow generation may remain constrained.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Cash conversion weakened as operating cash flow declined relative to revenue, while capital expenditure was slightly lower. The resulting free cash flow margin contracted meaningfully.
Compared to the prior quarter, free cash flow and operating cash flow were both lower, while revenue was roughly stable. Versus the same quarter last year, free cash flow dropped substantially despite higher revenue.
Monitor the trajectory of operating cash flow, as its decline was the primary factor behind the lower free cash flow.