Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow improved year over year but declined from the previous quarter. The quarter benefited from higher operating cash flow compared to a year ago, while capital expenditure rose sequentially, impacting free cash flow.
- Operating cash flow funded capital expenditure, resulting in free cash flow and a free cash flow margin. The margin was lower than the prior quarter's but higher than the year-ago quarter's.
- Compared to the previous quarter, free cash flow decreased due to lower operating cash flow and higher capital expenditure. Compared to the same quarter last year, free cash flow increased, driven by higher operating cash flow with capital expenditure relatively stable.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$6.2B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.7B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$2.4B
Cash generated by operations before capital spending.
CapEx
$704.0M
Capital spending and related asset purchases.
FCF margin
8.8%
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 |
|---|---|---|---|---|---|
| 2023-03-26 | $15.1B | $1.6B | $294.0M | $1.3B | 8.4% |
| 2023-06-25 | $16.7B | $1.1B | $329.0M | $771.0M | 4.6% |
| 2023-09-24 | $16.9B | $2.9B | $364.0M | $2.5B | 15.0% |
| 2023-12-31 | $18.9B | $2.4B | $704.0M | $1.7B | 8.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 89.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.7% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$16.0B | 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 from the prior quarter, a substantial increase that absorbed a larger portion of operating cash flow.
The higher capital expenditure reduced free cash flow and the free cash flow margin compared to the prior quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow funded capital expenditure, resulting in free cash flow and a free cash flow margin. The margin was lower than the prior quarter's but higher than the year-ago quarter's.
Compared to the previous quarter, free cash flow decreased due to lower operating cash flow and higher capital expenditure. Compared to the same quarter last year, free cash flow increased, driven by higher operating cash flow with capital expenditure relatively stable.
Monitor capital expenditure trends, as the sequential increase was a significant factor in the free cash flow decline.