Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow and margin weakened sequentially due to a lower operating cash flow, despite a reduction in capital expenditure. Compared to the same quarter a year ago, free cash flow and margin were stable, supported by higher revenue and slightly higher operating cash flow.
- Revenue was slightly lower than the prior quarter but higher than a year ago. Operating cash flow decreased from the prior quarter but was slightly above the year-ago level, while capital expenditure was lower than both periods.
- Compared to the prior quarter, free cash flow and margin weakened significantly as operating cash flow declined more than the drop in revenue. Versus the same quarter a year ago, free cash flow and margin were essentially stable, with revenue higher and operating cash flow slightly higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$10.9B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.8B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.9B
Cash generated by operations before capital spending.
CapEx
$110.0M
Capital spending and related asset purchases.
FCF margin
31.5%
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 |
|---|---|---|---|---|---|
| 2022-06-30 | $5.5B | $2.5B | $55.0M | $2.4B | 43.7% |
| 2022-09-30 | $5.8B | $3.9B | $111.0M | $3.7B | 65.1% |
| 2022-12-31 | $5.8B | $3.1B | $130.0M | $3.0B | 51.1% |
| 2023-03-31 | $5.7B | $1.9B | $110.0M | $1.8B | 31.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 76.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.9% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$9.0B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Operating Cash Flow Decline
Operating cash flow was lower than the prior quarter, which drove the reduction in free cash flow even as capital expenditure decreased. The free cash flow margin weakened from the previous period.
The sequential weakening in free cash flow margin was directly linked to the lower operating cash flow.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was slightly lower than the prior quarter but higher than a year ago. Operating cash flow decreased from the prior quarter but was slightly above the year-ago level, while capital expenditure was lower than both periods.
Compared to the prior quarter, free cash flow and margin weakened significantly as operating cash flow declined more than the drop in revenue. Versus the same quarter a year ago, free cash flow and margin were essentially stable, with revenue higher and operating cash flow slightly higher.
Monitor the trend in operating cash flow relative to revenue, as the sequential decline was the primary factor behind the lower free cash flow.