Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Cash conversion improved sharply from the prior quarter as free cash flow more than offset a higher capital expenditure. Versus the same quarter last year, cash conversion weakened due to a larger increase in capital spending relative to operating cash flow growth.
- Revenue increased from the prior quarter, and operating cash flow grew at a higher pace, resulting in a stronger free cash flow and a higher free cash flow margin. Capital expenditure rose from the previous period but at a slower rate than operating cash flow.
- Compared to the prior quarter, free cash flow margin improved from a lower level as free cash flow increased while revenue grew moderately. Relative to the same quarter one year earlier, free cash flow margin weakened as capital expenditure rose substantially more than operating cash flow.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$72.9B
Trailing twelve-month free cash flow.
Quarter free cash flow
$15.8B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$46.7B
Cash generated by operations before capital spending.
CapEx
$30.9B
Capital spending and related asset purchases.
FCF margin
19.1%
The share of revenue converted into free cash flow.
TTM FCF yield
2.5%
TTM FCF divided by market capitalization.
FCF reconciliation
Free cash flow is not a GAAP line item; it should be bridged from the cash flow statement.
| Operating cash flow | $46.7B | Cash generated by operations before capital spending. |
| Capital expenditures | $30.9B | Capital spending used to bridge CFO to FCF. |
| Free cash flow | $15.8B | Operating cash flow less capital spending. |
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 | $51.9B | $24.6B | $6.9B | $17.8B | 34.2% |
| 2022-09-30 | $50.1B | $23.2B | $6.3B | $16.9B | 33.7% |
| 2022-12-31 | $52.7B | $11.2B | $6.3B | $4.9B | 9.3% |
| 2023-03-31 | $52.9B | $24.4B | $6.6B | $17.8B | 33.7% |
| 2023-06-30 | $56.2B | $28.8B | $8.9B | $19.8B | 35.3% |
| 2023-09-30 | $56.5B | $30.6B | $9.9B | $20.7B | 36.6% |
| 2023-12-31 | $62.0B | $18.9B | $9.7B | $9.1B | 14.7% |
| 2024-03-31 | $61.9B | $31.9B | $11.0B | $21.0B | 33.9% |
| 2024-06-30 | $64.7B | $37.2B | $13.9B | $23.3B | 36.0% |
| 2024-09-30 | $65.6B | $34.2B | $14.9B | $19.3B | 29.4% |
| 2024-12-31 | $69.6B | $22.3B | $15.8B | $6.5B | 9.3% |
| 2025-03-31 | $70.1B | $37.0B | $16.7B | $20.3B | 29.0% |
| 2025-06-30 | $76.4B | $42.6B | $17.1B | $25.6B | 33.4% |
| 2025-09-30 | $77.7B | $45.1B | $19.4B | $25.7B | 33.0% |
| 2025-12-31 | $81.3B | $35.8B | $29.9B | $5.9B | 7.2% |
| 2026-03-31 | $82.9B | $46.7B | $30.9B | $15.8B | 19.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 49.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 37.3% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$8.2B | 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 Growth
Operating cash flow rose from the prior quarter at a faster pace than revenue, providing the primary support for the improvement in free cash flow. This was the strongest observable driver of the quarter's cash conversion change.
The increase in operating cash flow was the main factor behind the quarter-over-quarter improvement in free cash flow and margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased from the prior quarter, and operating cash flow grew at a higher pace, resulting in a stronger free cash flow and a higher free cash flow margin. Capital expenditure rose from the previous period but at a slower rate than operating cash flow.
Compared to the prior quarter, free cash flow margin improved from a lower level as free cash flow increased while revenue grew moderately. Relative to the same quarter one year earlier, free cash flow margin weakened as capital expenditure rose substantially more than operating cash flow.
Monitor the trend in capital expenditure relative to operating cash flow, as the gap widened year-over-year and compressed quarter-over-quarter.
Valuation context
A cash-flow page should show how much investors are paying for the cash stream, without turning into a full DCF.
| Market capitalization | $2.9T | Used as the denominator for FCF yield. |
| TTM FCF yield | 2.5% | TTM free cash flow divided by market capitalization. |
| EV / TTM FCF | 39.3x | A quick valuation bridge, not a full DCF. |
Peer context
Free cash flow quality is easier to read against related public companies.
Risks and tripwires
Observable signals that would weaken the free cash flow thesis.
| Risk | Tripwire | Why it matters |
|---|---|---|
| FCF margin compression | FCF margin falls for two consecutive quarters. | Cash conversion may be weakening before earnings show it. |
| Capital intensity rises | CapEx/revenue moves materially above the recent run rate. | More operating cash flow would be consumed before becoming FCF. |
| Working capital drag | Inventory or receivables grow faster than revenue. | Reported growth may not translate into cash. |