Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow was lower than the prior quarter and the same quarter a year earlier, driven by a notably lower operating cash flow. The free cash flow margin weakened compared to both periods.
- The conversion of revenue into free cash flow was weak this quarter, as operating cash flow was low relative to revenue, and capital expenditure consumed a larger share of operating cash flow than in the prior quarter and the year-ago quarter.
- Revenue, operating cash flow, and free cash flow all declined from the preceding quarter and from the same quarter one year earlier. The free cash flow margin contracted notably.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$12.2B
Trailing twelve-month free cash flow.
Quarter free cash flow
$591.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.1B
Cash generated by operations before capital spending.
CapEx
$532.0M
Capital spending and related asset purchases.
FCF margin
1.6%
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 |
|---|---|---|---|---|---|
| 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% |
| 2023-12-31 | $36.3B | $1.1B | $532.0M | $591.0M | 1.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 40.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.5% | 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.
Lower Operating Cash Flow
Operating cash flow decreased compared to both the prior quarter and the same quarter a year earlier, substantially reducing free cash flow.
The reduced operating cash flow was the main factor behind the weaker free cash flow and margin in the current quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
The conversion of revenue into free cash flow was weak this quarter, as operating cash flow was low relative to revenue, and capital expenditure consumed a larger share of operating cash flow than in the prior quarter and the year-ago quarter.
Revenue, operating cash flow, and free cash flow all declined from the preceding quarter and from the same quarter one year earlier. The free cash flow margin contracted notably.
Monitor the trajectory of working capital changes, which the filing notes partially offset lower operating results in the current period.