Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Operating cash flow rose year over year while capital expenditure was relatively stable, leading to a higher free cash flow and an improved free cash flow margin. Sequentially, revenue declined but free cash flow margin strengthened as the proportion of operating cash flow to revenue increased.
- Revenue was largely unchanged from a year ago, but operating cash flow increased, indicating a stronger conversion of revenue into cash. Capital expenditure was slightly higher year over year, yet free cash flow and margin both improved as operating cash flow more than covered the capex increase.
- Compared to the previous quarter, revenue was lower and operating cash flow was slightly lower, yet free cash flow was marginally lower and free cash flow margin improved. Versus the same quarter a year ago, revenue was nearly stable, operating cash flow was higher, and free cash flow and margin were both higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$9.6B
Trailing twelve-month free cash flow.
Quarter free cash flow
$3.5B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$3.8B
Cash generated by operations before capital spending.
CapEx
$300.0M
Capital spending and related asset purchases.
FCF margin
24.4%
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 |
|---|---|---|---|---|---|
| 2022-06-30 | $15.5B | $1.3B | $339.0M | $982.0M | 6.3% |
| 2022-09-30 | $14.1B | $1.9B | $317.0M | $1.6B | 11.2% |
| 2022-12-31 | $16.7B | $4.0B | $409.0M | $3.6B | 21.3% |
| 2023-03-31 | $14.3B | $3.8B | $300.0M | $3.5B | 24.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 374.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.1% | 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.
Stronger Operating Cash Flow Conversion
Operating cash flow increased year over year despite nearly flat revenue, signaling improved cash generation efficiency from the current revenue base.
This directly lifted free cash flow and the free cash flow margin to higher levels compared to the prior year quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was largely unchanged from a year ago, but operating cash flow increased, indicating a stronger conversion of revenue into cash. Capital expenditure was slightly higher year over year, yet free cash flow and margin both improved as operating cash flow more than covered the capex increase.
Compared to the previous quarter, revenue was lower and operating cash flow was slightly lower, yet free cash flow was marginally lower and free cash flow margin improved. Versus the same quarter a year ago, revenue was nearly stable, operating cash flow was higher, and free cash flow and margin were both higher.
Monitor whether the free cash flow margin can be sustained near the current level if revenue remains at or below the prior quarter's level.