Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
The quarter's free cash flow and margin were higher than both the prior quarter and the same quarter a year ago. Revenue and operating cash flow also improved compared to the prior quarter, while capital expenditure was lower.
- Revenue increased from the prior quarter, while operating cash flow improved more than proportionally, leading to a higher free cash flow and margin. Capital expenditure was reduced, further supporting cash conversion.
- Compared to the immediately preceding quarter, all key metrics improved: revenue, operating cash flow, free cash flow, and margin were higher, while capital expenditure was lower. Versus the same quarter a year earlier, operating cash flow and free cash flow were substantially higher despite lower revenue, and the margin improved.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$15.3B
Trailing twelve-month free cash flow.
Quarter free cash flow
$4.5B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$5.0B
Cash generated by operations before capital spending.
CapEx
$420.0M
Capital spending and related asset purchases.
FCF margin
11.1%
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 | $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% |
| 2023-09-30 | $40.9B | $5.0B | $420.0M | $4.5B | 11.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 138.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.0% | 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 improvement
Operating cash flow was higher than both the prior quarter and the year-ago quarter, providing the primary uplift to free cash flow. This occurred even as revenue declined compared to the year-ago period.
The stronger operating cash flow drove the overall improvement in free cash flow and margin for the quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased from the prior quarter, while operating cash flow improved more than proportionally, leading to a higher free cash flow and margin. Capital expenditure was reduced, further supporting cash conversion.
Compared to the immediately preceding quarter, all key metrics improved: revenue, operating cash flow, free cash flow, and margin were higher, while capital expenditure was lower. Versus the same quarter a year earlier, operating cash flow and free cash flow were substantially higher despite lower revenue, and the margin improved.
The company's filing notes that the increase in operating cash flow was primarily due to a favorable change in working capital; monitor the sustainability of working capital trends.