Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue increased sharply from the prior quarter and was also higher than the same quarter last year. Operating cash flow declined, and with higher capital expenditure, free cash flow decreased, leading to a significantly lower free cash flow margin.
- Revenue was much higher sequentially, but operating cash flow was lower, resulting in a weaker conversion of revenue into cash. Capital expenditure rose relative to both the previous quarter and the year-ago quarter, further reducing free cash flow.
- Compared to the preceding quarter, revenue improved while operating cash flow, free cash flow, and free cash flow margin all weakened. Versus the same quarter one year earlier, revenue was higher, but operating cash flow, free cash flow, and free cash flow margin were all lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$17.2B
Trailing twelve-month free cash flow.
Quarter free cash flow
$3.8B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$5.3B
Cash generated by operations before capital spending.
CapEx
$1.6B
Capital spending and related asset purchases.
FCF margin
18.9%
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 |
|---|---|---|---|---|---|
| 2022-04-03 | $19.8B | $4.0B | $607.0M | $3.4B | 17.0% |
| 2022-07-03 | $27.6B | $5.6B | $863.0M | $4.7B | 17.1% |
| 2022-10-02 | $12.6B | $6.3B | $952.0M | $5.3B | 42.3% |
| 2023-01-01 | $19.9B | $5.3B | $1.6B | $3.8B | 18.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 106.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 8.0% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$15.5B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Cash Conversion Weakening
Revenue rose significantly from both the prior quarter and the year-ago quarter, yet operating cash flow declined. This divergence is the strongest observable driver of the quarter's lower free cash flow and margin.
The company generated less free cash flow from a larger revenue base, pressuring the free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was much higher sequentially, but operating cash flow was lower, resulting in a weaker conversion of revenue into cash. Capital expenditure rose relative to both the previous quarter and the year-ago quarter, further reducing free cash flow.
Compared to the preceding quarter, revenue improved while operating cash flow, free cash flow, and free cash flow margin all weakened. Versus the same quarter one year earlier, revenue was higher, but operating cash flow, free cash flow, and free cash flow margin were all lower.
The large increase in revenue coupled with a decline in operating cash flow suggests a shift in cash conversion efficiency that warrants monitoring.