Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow margin weakened compared with both the prior quarter and the same quarter a year ago. Revenue increased slightly year over year, but lower operating cash flow and higher capital expenditure pressured free cash flow.
- The conversion of revenue into free cash flow decreased, as operating cash flow relative to revenue declined and capital expenditure rose.
- Compared with the prior quarter, revenue, operating cash flow, and free cash flow were all lower, and the free cash flow margin narrowed significantly. Relative to the same quarter a year earlier, revenue was higher but free cash flow was lower, with a similar margin decline.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$9.7B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.8B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$2.7B
Cash generated by operations before capital spending.
CapEx
$851.0M
Capital spending and related asset purchases.
FCF margin
16.8%
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 | $11.0B | $160.0M | $276.0M | -$116.0M | -1.1% |
| 2023-06-30 | $12.0B | $4.5B | $339.0M | $4.1B | 34.5% |
| 2023-09-29 | $12.0B | $4.3B | $386.0M | $3.9B | 32.7% |
| 2023-12-31 | $10.8B | $2.7B | $851.0M | $1.8B | 16.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 92.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 7.8% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$28.1B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Weaker operating cash flow
The decline in operating cash flow was the primary factor behind the lower free cash flow this quarter. Although revenue rose slightly year over year, the reduction in operating cash flow more than offset that gain.
Improvement in operating cash flow will be key to restoring free cash flow in the coming periods.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
The conversion of revenue into free cash flow decreased, as operating cash flow relative to revenue declined and capital expenditure rose.
Compared with the prior quarter, revenue, operating cash flow, and free cash flow were all lower, and the free cash flow margin narrowed significantly. Relative to the same quarter a year earlier, revenue was higher but free cash flow was lower, with a similar margin decline.
Track the trajectory of capital expenditure, as it was notably higher this quarter relative to both comparison periods.