Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow improved from the prior quarter but weakened compared to the same quarter last year. The cash conversion rate rose sequentially as operating cash flow grew faster than revenue.
- Revenue increased while operating cash flow rose more sharply, leading to a higher free cash flow margin than the prior quarter. Capital expenditure was higher than both comparison periods, partially offsetting the cash generation.
- Compared to the prior quarter, free cash flow and margin were higher, driven by stronger operating cash flow. Versus the same quarter a year ago, free cash flow and margin were lower despite higher revenue, as operating cash flow declined and capital expenditure increased.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.1B
Trailing twelve-month free cash flow.
Quarter free cash flow
$869.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.2B
Cash generated by operations before capital spending.
CapEx
$359.0M
Capital spending and related asset purchases.
FCF margin
8.9%
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 | $10.0B | $2.3B | $632.0M | $1.6B | 16.1% |
| 2023-03-31 | $9.3B | -$702.0M | $309.0M | -$1.0B | -10.9% |
| 2023-06-30 | $9.6B | $919.0M | $304.0M | $615.0M | 6.4% |
| 2023-09-30 | $9.8B | $1.2B | $359.0M | $869.0M | 8.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 92.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.7% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$11.8B | 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 increased from the prior quarter, outpacing revenue growth and lifting free cash flow and margin. This was the strongest observable driver of the quarter's cash conversion improvement.
Higher operating cash flow directly improved free cash flow and margin compared to the prior quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased while operating cash flow rose more sharply, leading to a higher free cash flow margin than the prior quarter. Capital expenditure was higher than both comparison periods, partially offsetting the cash generation.
Compared to the prior quarter, free cash flow and margin were higher, driven by stronger operating cash flow. Versus the same quarter a year ago, free cash flow and margin were lower despite higher revenue, as operating cash flow declined and capital expenditure increased.
Monitor the trend in capital expenditure, which was higher in both comparisons and reduced free cash flow relative to operating cash flow.