Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue, operating cash flow, free cash flow, and free cash flow margin all rose compared to both the prior quarter and the same quarter last year. Capital expenditure increased sequentially but was significantly lower than the year-ago period.
- Operating cash flow converted into free cash flow after deducting capital expenditure, yielding a free cash flow margin that improved from both the prior quarter and the year-ago period. The reduction in capital expenditure relative to the year-ago quarter was the primary factor behind the margin expansion, while revenue growth also contributed to the higher free cash flow.
- Compared to the prior quarter, revenue, operating cash flow, free cash flow, and free cash flow margin were all higher, while capital expenditure was also higher. Compared to the same quarter one year earlier, all metrics were higher except for capital expenditure, which was lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$38.0B
Trailing twelve-month free cash flow.
Quarter free cash flow
$13.9B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$20.4B
Cash generated by operations before capital spending.
CapEx
$6.5B
Capital spending and related asset purchases.
FCF margin
40.7%
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 |
|---|---|---|---|---|---|
| 2022-12-31 | $32.2B | $14.5B | $8.8B | $5.7B | 17.8% |
| 2023-03-31 | $28.6B | $14.0B | $6.8B | $7.2B | 25.0% |
| 2023-06-30 | $32.0B | $17.3B | $6.1B | $11.2B | 34.9% |
| 2023-09-30 | $34.1B | $20.4B | $6.5B | $13.9B | 40.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 120.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 19.0% | Lower capital intensity usually supports FCF margin. |
| Net cash | $18.5B | 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 strength
The most notable observable driver was the significant increase in operating cash flow compared to both the prior quarter and the year-ago period, which directly lifted free cash flow. This occurred even as capital expenditure increased sequentially, demonstrating that underlying cash generation was the dominant factor.
The higher operating cash flow more than offset the sequential capital expenditure increase, resulting in improved 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 converted into free cash flow after deducting capital expenditure, yielding a free cash flow margin that improved from both the prior quarter and the year-ago period. The reduction in capital expenditure relative to the year-ago quarter was the primary factor behind the margin expansion, while revenue growth also contributed to the higher free cash flow.
Compared to the prior quarter, revenue, operating cash flow, free cash flow, and free cash flow margin were all higher, while capital expenditure was also higher. Compared to the same quarter one year earlier, all metrics were higher except for capital expenditure, which was lower.
Track the trend in capital expenditure, as it shifted higher sequentially after a steep decline from the year-ago level.