Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue increased compared to both the prior quarter and the same quarter last year. However, operating cash flow and free cash flow were significantly lower than both comparison periods, resulting in a much weaker free cash flow margin.
- Despite higher revenue, operating cash flow was substantially lower than in the preceding quarter and the year-ago quarter. Capital expenditure was slightly higher than the prior quarter but lower than a year ago, yet the combination produced free cash flow that was far below both comparison periods, with a free cash flow margin that weakened markedly.
- Compared to the immediately preceding quarter, revenue improved while operating cash flow, free cash flow, and free cash flow margin all declined. Versus the same quarter one year earlier, revenue was higher but operating cash flow, free cash flow, and free cash flow margin were all lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$3.0B
Trailing twelve-month free cash flow.
Quarter free cash flow
$164.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$254.0M
Cash generated by operations before capital spending.
CapEx
$90.0M
Capital spending and related asset purchases.
FCF margin
0.2%
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 |
|---|---|---|---|---|---|
| 2023-03-31 | $68.9B | $3.3B | $293.0M | $3.0B | 4.4% |
| 2023-06-30 | $74.5B | -$1.1B | $78.0M | -$1.1B | -1.5% |
| 2023-09-30 | $77.2B | $965.0M | $75.0M | $890.0M | 1.2% |
| 2023-12-31 | $80.9B | $254.0M | $90.0M | $164.0M | 0.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 27.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.1% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$3.7B | 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 dropped sharply from both the prior quarter and the year-ago quarter, despite higher revenue. This was the primary factor behind the weakened free cash flow and margin.
The lower operating cash flow directly reduced free cash flow and compressed the free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Despite higher revenue, operating cash flow was substantially lower than in the preceding quarter and the year-ago quarter. Capital expenditure was slightly higher than the prior quarter but lower than a year ago, yet the combination produced free cash flow that was far below both comparison periods, with a free cash flow margin that weakened markedly.
Compared to the immediately preceding quarter, revenue improved while operating cash flow, free cash flow, and free cash flow margin all declined. Versus the same quarter one year earlier, revenue was higher but operating cash flow, free cash flow, and free cash flow margin were all lower.
Monitor the relationship between revenue growth and operating cash flow, as the current quarter shows a wide divergence with revenue rising but cash conversion weakening.