Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow and margin were lower compared to both the prior quarter and the same quarter a year earlier. Revenue was higher than the prior quarter but lower than the year-ago quarter, while operating cash flow declined relative to both periods.
- Revenue increased from the prior quarter but decreased from the year-ago quarter. Operating cash flow and free cash flow were lower than both comparison periods, and capital expenditure was higher than the prior quarter but lower than the year-ago quarter, resulting in a weakened free cash flow margin.
- Compared to the prior quarter, free cash flow and margin were lower despite higher revenue, as operating cash flow decreased. Versus the same quarter a year earlier, all metrics except capital expenditure were lower, with free cash flow and margin showing the largest relative declines.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$12.6B
Trailing twelve-month free cash flow.
Quarter free cash flow
$3.5B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$4.0B
Cash generated by operations before capital spending.
CapEx
$481.0M
Capital spending and related asset purchases.
FCF margin
9.6%
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 |
|---|---|---|---|---|---|
| 2022-09-30 | $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% |
| 2023-06-30 | $36.3B | $4.0B | $481.0M | $3.5B | 9.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 157.4% | 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 Pressure
Operating cash flow declined from both the prior quarter and the year-ago quarter, driven by lower operating results as noted in the filing. Capital expenditure remained relatively stable, but the drop in operating cash flow reduced free cash flow and margin.
If operating cash flow continues to weaken, free cash flow generation may remain under pressure.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased from the prior quarter but decreased from the year-ago quarter. Operating cash flow and free cash flow were lower than both comparison periods, and capital expenditure was higher than the prior quarter but lower than the year-ago quarter, resulting in a weakened free cash flow margin.
Compared to the prior quarter, free cash flow and margin were lower despite higher revenue, as operating cash flow decreased. Versus the same quarter a year earlier, all metrics except capital expenditure were lower, with free cash flow and margin showing the largest relative declines.
Monitor the sustainability of operating cash flow given the filing's discussion of decreased operating results partially offset by favorable working capital changes.