Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow improved sharply from the prior quarter, with a significant increase in operating cash flow despite a slight decline in revenue. The margin also strengthened compared to the year-ago quarter, though that comparison is affected by a different revenue base.
- Revenue was stable quarter over quarter, but operating cash flow rose substantially, driving a higher free cash flow margin. Capital expenditure was slightly lower, contributing to the improved cash conversion.
- Compared with the preceding quarter, operating cash flow and free cash flow were both higher, while revenue was slightly lower. Versus the same quarter one year earlier, operating cash flow increased and free cash flow was higher, but revenue was also higher, leading to a lower free cash flow margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$15.7B
Trailing twelve-month free cash flow.
Quarter free cash flow
$6.5B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$7.5B
Cash generated by operations before capital spending.
CapEx
$967.0M
Capital spending and related asset purchases.
FCF margin
30.5%
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 |
|---|---|---|---|---|---|
| 2023-01-01 | $19.9B | $5.3B | $1.6B | $3.8B | 18.9% |
| 2023-04-02 | $20.9B | $3.3B | $863.0M | $2.4B | 11.5% |
| 2023-07-02 | $21.5B | $4.2B | $1.1B | $3.1B | 14.2% |
| 2023-10-01 | $21.4B | $7.5B | $967.0M | $6.5B | 30.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 25.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 4.5% | 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.
Strong operating cash flow
Operating cash flow increased significantly from the prior quarter and also improved from the year-ago quarter, despite relatively stable revenue. This was the primary factor behind the elevated free cash flow.
The higher operating cash flow drove a large sequential improvement in free cash flow and the related margin.
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 rose substantially, driving a higher free cash flow margin. Capital expenditure was slightly lower, contributing to the improved cash conversion.
Compared with the preceding quarter, operating cash flow and free cash flow were both higher, while revenue was slightly lower. Versus the same quarter one year earlier, operating cash flow increased and free cash flow was higher, but revenue was also higher, leading to a lower free cash flow margin.
Monitor the trend in capital expenditure, which decreased from both the prior quarter and the year-ago quarter.