Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow increased sequentially as capital expenditure declined, offsetting a slight drop in operating cash flow. Compared to the same quarter last year, free cash flow was lower due to higher capital spending.
- Revenue was lower than the prior quarter but higher than a year ago. Operating cash flow edged down sequentially and was slightly below the year-ago level. Capital expenditure fell sharply from the previous quarter but rose from the same quarter last year. The free cash flow margin improved sequentially to a level above the prior quarter but below the year-ago margin.
- Sequentially, free cash flow rose as capital expenditure decreased more than the decline in operating cash flow. Year over year, free cash flow fell because capital expenditure increased while operating cash flow was nearly flat.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$17.8B
Trailing twelve-month free cash flow.
Quarter free cash flow
$7.2B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$14.0B
Cash generated by operations before capital spending.
CapEx
$6.8B
Capital spending and related asset purchases.
FCF margin
25.0%
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 | $28.8B | $12.2B | $7.6B | $4.6B | 16.0% |
| 2022-09-30 | $27.7B | $9.7B | $9.4B | $317.0M | 1.1% |
| 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% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 125.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 23.8% | Lower capital intensity usually supports FCF margin. |
| Net cash | $1.6B | 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 Reduction
Capital expenditure in the current quarter was lower than the prior quarter, which was the primary factor behind the sequential improvement in free cash flow despite lower revenue and operating cash flow.
The lower capital expenditure directly boosted free cash flow and the free cash flow margin compared to the previous quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was lower than the prior quarter but higher than a year ago. Operating cash flow edged down sequentially and was slightly below the year-ago level. Capital expenditure fell sharply from the previous quarter but rose from the same quarter last year. The free cash flow margin improved sequentially to a level above the prior quarter but below the year-ago margin.
Sequentially, free cash flow rose as capital expenditure decreased more than the decline in operating cash flow. Year over year, free cash flow fell because capital expenditure increased while operating cash flow was nearly flat.
Monitor the relationship between capital expenditure and operating cash flow, as changes in either can significantly affect free cash flow.