Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was stable year over year and higher sequentially, but free cash flow weakened in both comparisons. The decline was driven by lower operating cash flow and higher capital expenditure relative to the prior year.
- Operating cash flow as a share of revenue narrowed from the prior quarter and the year-ago period, while capital expenditure increased as a proportion of revenue year over year. The resulting free cash flow margin contracted sequentially and year over year.
- Compared with the immediately preceding quarter, revenue improved but operating cash flow and free cash flow were lower. Year over year, revenue was unchanged, while both operating cash flow and free cash flow weakened, with capital expenditure notably higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$5.4B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.1B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.9B
Cash generated by operations before capital spending.
CapEx
$829.0M
Capital spending and related asset purchases.
FCF margin
13.2%
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 | $8.5B | $2.1B | $826.0M | $1.3B | 15.5% |
| 2022-09-30 | $8.8B | $2.6B | $762.0M | $1.9B | 21.3% |
| 2022-12-31 | $7.9B | $2.1B | $936.0M | $1.2B | 14.7% |
| 2023-03-31 | $8.2B | $1.9B | $829.0M | $1.1B | 13.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 71.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 10.1% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$8.5B | 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 sharply compared with the same quarter last year, and remained elevated relative to the prior quarter. This required a larger share of operating cash flow, reducing free cash flow available.
The higher capital spending was the primary observable factor behind the year-over-year decline in free cash flow and margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a share of revenue narrowed from the prior quarter and the year-ago period, while capital expenditure increased as a proportion of revenue year over year. The resulting free cash flow margin contracted sequentially and year over year.
Compared with the immediately preceding quarter, revenue improved but operating cash flow and free cash flow were lower. Year over year, revenue was unchanged, while both operating cash flow and free cash flow weakened, with capital expenditure notably higher.
Monitor the trajectory of operating cash flow, as it declined both sequentially and year over year, putting pressure on free cash flow generation.