Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow was stable compared to the prior quarter and improved from a year ago, supported by higher operating cash flow and lower capital expenditure. The free cash flow margin strengthened sequentially and year-over-year.
- Revenue was lower than the prior quarter but slightly below the year-ago level, while operating cash flow decreased modestly from the prior quarter but increased significantly from a year ago. Capital expenditure declined both sequentially and year-over-year, resulting in free cash flow that was stable versus the prior quarter and substantially higher than a year ago.
- Compared to the prior quarter, revenue was lower and operating cash flow was slightly lower, but capital expenditure decreased, leading to free cash flow that was stable. Compared to the same quarter last year, revenue was slightly lower, but operating cash flow was higher and capital expenditure was lower, resulting in improved free cash flow and a stronger free cash flow margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$15.5B
Trailing twelve-month free cash flow.
Quarter free cash flow
$3.6B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$4.1B
Cash generated by operations before capital spending.
CapEx
$457.0M
Capital spending and related asset purchases.
FCF margin
10.3%
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 | $53.8B | $7.0B | $498.0M | $6.5B | 12.0% |
| 2022-09-30 | $45.8B | $2.5B | $701.0M | $1.8B | 4.0% |
| 2022-12-31 | $39.8B | $4.4B | $726.0M | $3.7B | 9.2% |
| 2023-03-31 | $34.9B | $4.1B | $457.0M | $3.6B | 10.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 132.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.3% | Lower capital intensity usually supports FCF margin. |
| Net cash | n/a | 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
Operating cash flow increased substantially from a year ago, driven by improved operating results and a less unfavorable change in working capital compared to the prior year period, as noted in the filing.
Higher operating cash flow was the primary driver of the year-over-year improvement in free cash flow.
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 slightly below the year-ago level, while operating cash flow decreased modestly from the prior quarter but increased significantly from a year ago. Capital expenditure declined both sequentially and year-over-year, resulting in free cash flow that was stable versus the prior quarter and substantially higher than a year ago.
Compared to the prior quarter, revenue was lower and operating cash flow was slightly lower, but capital expenditure decreased, leading to free cash flow that was stable. Compared to the same quarter last year, revenue was slightly lower, but operating cash flow was higher and capital expenditure was lower, resulting in improved free cash flow and a stronger free cash flow margin.
Monitor the trend in capital expenditure, which decreased this quarter and was a key factor supporting free cash flow.