Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue fell from the prior quarter and rose from the same quarter a year earlier. Free cash flow weakened compared to both periods, with the free cash flow margin declining most notably versus the year-ago quarter.
- Operating cash flow as a percentage of revenue decreased relative to both the prior quarter and the year-ago quarter, while capital expenditure moderated in absolute terms compared to the prior quarter. The resulting free cash flow margin contracted sequentially and more sharply on an annual basis.
- Compared to the immediately preceding quarter, revenue, operating cash flow, and free cash flow were all lower, while capital expenditure also declined. Versus the same quarter one year earlier, revenue was higher but operating cash flow, free cash flow, and the free cash flow margin were all lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$63.3B
Trailing twelve-month free cash flow.
Quarter free cash flow
$16.9B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$23.2B
Cash generated by operations before capital spending.
CapEx
$6.3B
Capital spending and related asset purchases.
FCF margin
33.7%
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 |
|---|---|---|---|---|---|
| 2021-12-31 | $51.7B | $14.5B | $5.9B | $8.6B | 16.7% |
| 2022-03-31 | $49.4B | $25.4B | $5.3B | $20.0B | 40.6% |
| 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% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 96.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 12.5% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$25.7B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Cash flow margin contraction relative to revenue growth
Revenue increased on a year-over-year basis, but operating cash flow and free cash flow both decreased, leading to a lower cash conversion rate. The filing context notes that service and other revenue grew while product revenue declined, but no explicit cash flow causation is provided.
The weakened cash conversion reduced the free cash flow margin, making it a key metric to watch in upcoming quarters.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a percentage of revenue decreased relative to both the prior quarter and the year-ago quarter, while capital expenditure moderated in absolute terms compared to the prior quarter. The resulting free cash flow margin contracted sequentially and more sharply on an annual basis.
Compared to the immediately preceding quarter, revenue, operating cash flow, and free cash flow were all lower, while capital expenditure also declined. Versus the same quarter one year earlier, revenue was higher but operating cash flow, free cash flow, and the free cash flow margin were all lower.
Monitor whether the free cash flow margin stabilizes after its year-over-year decline, given the divergence from rising revenue.