Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow was stable compared to the same quarter last year, while operating cash flow improved relative to the prior quarter. The free cash flow margin weakened slightly from the year-ago level but strengthened versus the preceding quarter.
- Revenue increased from both the prior quarter and the year-ago quarter. Operating cash flow rose sharply from the prior quarter and was slightly higher than the year-ago quarter. Capital expenditure was higher than both comparison periods. Free cash flow was unchanged from the year-ago quarter but significantly higher than the prior quarter. The free cash flow margin was lower than the year-ago quarter but higher than the prior quarter.
- Compared to the prior quarter, revenue, operating cash flow, and free cash flow all improved, with free cash flow margin strengthening. Compared to the same quarter last year, revenue was higher, operating cash flow was slightly higher, capital expenditure was higher, and free cash flow was unchanged, resulting in a slightly lower free cash flow margin.
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
$1.6B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$2.4B
Cash generated by operations before capital spending.
CapEx
$803.0M
Capital spending and related asset purchases.
FCF margin
15.3%
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 | $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% |
| 2023-12-31 | $10.6B | $2.4B | $803.0M | $1.6B | 15.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -304.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 7.5% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$10.7B | 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 increased substantially from the prior quarter and was slightly above the year-ago level, driving a significant sequential improvement in free cash flow despite higher capital expenditure.
The stronger operating cash flow was the primary factor behind the sequential free cash flow increase.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased from both the prior quarter and the year-ago quarter. Operating cash flow rose sharply from the prior quarter and was slightly higher than the year-ago quarter. Capital expenditure was higher than both comparison periods. Free cash flow was unchanged from the year-ago quarter but significantly higher than the prior quarter. The free cash flow margin was lower than the year-ago quarter but higher than the prior quarter.
Compared to the prior quarter, revenue, operating cash flow, and free cash flow all improved, with free cash flow margin strengthening. Compared to the same quarter last year, revenue was higher, operating cash flow was slightly higher, capital expenditure was higher, and free cash flow was unchanged, resulting in a slightly lower free cash flow margin.
Monitor capital expenditure, which was higher than both the prior quarter and the year-ago quarter, as it directly affected free cash flow relative to operating cash flow.