Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Operating cash flow turned sharply negative, driving free cash flow deeply negative despite higher revenue. Free cash flow margin weakened significantly compared to the prior quarter and worsened from the same quarter last year.
- Revenue was stable quarter over quarter, but operating cash flow swung from positive to strongly negative, resulting in a large negative free cash flow. Capital expenditure was relatively stable, so the cash conversion decline was driven entirely by the sharp drop in operating cash flow.
- Compared to the prior quarter, free cash flow fell from positive to negative and the margin worsened considerably. Relative to the same quarter one year ago, free cash flow was more negative even as revenue grew, indicating a weaker cash conversion efficiency.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$3.0B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$7.4B
Free cash flow in the selected fiscal quarter.
Operating cash flow
-$7.1B
Cash generated by operations before capital spending.
CapEx
$283.0M
Capital spending and related asset purchases.
FCF margin
-28.0%
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 | $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% |
| 2023-12-31 | $26.5B | -$7.1B | $283.0M | -$7.4B | -28.0% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 1371.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.1% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$7.0B | 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 Swing
Operating cash flow shifted from a positive level in the prior quarter to a large negative value, overwhelming revenue growth and leading to a deeply negative free cash flow. This change is the strongest observable driver of the quarter's cash performance.
The negative operating cash flow directly caused a large free cash outflow, putting pressure on the company's cash position.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was stable quarter over quarter, but operating cash flow swung from positive to strongly negative, resulting in a large negative free cash flow. Capital expenditure was relatively stable, so the cash conversion decline was driven entirely by the sharp drop in operating cash flow.
Compared to the prior quarter, free cash flow fell from positive to negative and the margin worsened considerably. Relative to the same quarter one year ago, free cash flow was more negative even as revenue grew, indicating a weaker cash conversion efficiency.
Monitor whether operating cash flow can return to positive levels in the coming quarter, as it is the primary determinant of free cash flow.