Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue for the quarter was lower than both the prior quarter and the same quarter a year ago, while operating cash flow remained relatively stable. Free cash flow and free cash flow margin improved compared to the prior quarter, with the margin reaching a level higher than both comparison periods.
- Operating cash flow exceeded revenue, indicating cash conversion was stronger than the revenue base would suggest. Combined with lower capital expenditure, free cash flow was higher than the prior quarter and slightly below the year-ago quarter.
- Compared with the immediately preceding quarter, revenue was lower, operating cash flow was slightly higher, capital expenditure was lower, and free cash flow and free cash flow margin improved. Versus the same quarter one year earlier, revenue was lower, operating cash flow was lower, capital expenditure was lower, free cash flow was slightly lower, and free cash flow margin improved.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$6.6B
Trailing twelve-month free cash flow.
Quarter free cash flow
$2.3B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$3.2B
Cash generated by operations before capital spending.
CapEx
$970.0M
Capital spending and related asset purchases.
FCF margin
101.2%
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 | $7.1B | $2.9B | $1.5B | $1.4B | 19.8% |
| 2023-06-30 | $6.6B | $3.1B | $1.6B | $1.4B | 21.6% |
| 2023-09-30 | $7.3B | $3.1B | $1.6B | $1.5B | 20.8% |
| 2023-12-31 | $2.2B | $3.2B | $970.0M | $2.3B | 101.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 189.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 43.2% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$17.6B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Lower capital expenditure
Capital expenditure was lower than both the prior quarter and the year-ago quarter, which contributed to free cash flow being higher than the prior quarter despite lower revenue. The reduction in spending supported cash flow generation.
The lower capital expenditure was the strongest observable driver of the improved free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow exceeded revenue, indicating cash conversion was stronger than the revenue base would suggest. Combined with lower capital expenditure, free cash flow was higher than the prior quarter and slightly below the year-ago quarter.
Compared with the immediately preceding quarter, revenue was lower, operating cash flow was slightly higher, capital expenditure was lower, and free cash flow and free cash flow margin improved. Versus the same quarter one year earlier, revenue was lower, operating cash flow was lower, capital expenditure was lower, free cash flow was slightly lower, and free cash flow margin improved.
Monitor the relationship between free cash flow margin and revenue, as the margin was significantly elevated relative to the revenue level.