Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue improved compared to both the prior quarter and the same quarter last year, but operating cash flow weakened and capital expenditure rose, resulting in negative free cash flow. The free cash flow margin turned negative, reflecting a significant cash conversion decline.
- Higher revenue did not translate into stronger cash generation as operating cash flow decreased while capital expenditure increased, leading to a free cash outflow. The cash conversion cycle weakened substantially from the prior periods.
- Compared to the prior quarter, revenue was higher but operating cash flow was lower and capital expenditure was higher, shifting free cash flow from positive to negative. Versus the same quarter last year, revenue grew while operating cash flow declined and capital expenditure increased, turning a positive free cash flow deeply negative.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$14.3B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$2.1B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$4.6B
Cash generated by operations before capital spending.
CapEx
$6.7B
Capital spending and related asset purchases.
FCF margin
-13.4%
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 |
|---|---|---|---|---|---|
| 2023-04-01 | $11.7B | -$1.8B | $7.4B | -$9.2B | -78.5% |
| 2023-07-01 | $12.9B | $2.8B | $5.9B | -$3.1B | -23.8% |
| 2023-09-30 | $14.2B | $5.8B | $5.8B | $71.0M | 0.5% |
| 2023-12-30 | $15.4B | $4.6B | $6.7B | -$2.1B | -13.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -77.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 43.5% | 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.
Capital Expenditure Increase
Capital expenditure rose compared to both the prior quarter and the year-ago quarter, while operating cash flow declined, causing free cash flow to turn negative despite higher revenue.
The increase in capital expenditure was the primary factor behind the swing to negative free cash flow this quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Higher revenue did not translate into stronger cash generation as operating cash flow decreased while capital expenditure increased, leading to a free cash outflow. The cash conversion cycle weakened substantially from the prior periods.
Compared to the prior quarter, revenue was higher but operating cash flow was lower and capital expenditure was higher, shifting free cash flow from positive to negative. Versus the same quarter last year, revenue grew while operating cash flow declined and capital expenditure increased, turning a positive free cash flow deeply negative.
Monitor the magnitude of capital expenditure relative to operating cash flow, as elevated spending may continue to pressure free cash flow.