Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow remained negative in the current quarter, but the deficit narrowed compared to both the preceding quarter and the same quarter one year earlier. The improvement was supported by higher operating cash flow and, relative to the year-ago period, lower capital expenditure.
- Revenue increased from the previous quarter and from the same quarter last year. Operating cash flow was higher than both comparison periods. Capital expenditure was stable versus the prior quarter but lower than a year ago. Consequently, free cash flow, while still negative, showed an improved margin.
- Compared to the immediately preceding quarter, revenue and operating cash flow were higher, capital expenditure was unchanged, and free cash flow and its margin improved. Versus the same quarter one year earlier, revenue and operating cash flow were higher, capital expenditure was lower, and free cash flow and its margin also improved.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$4.0B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$611.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.8B
Cash generated by operations before capital spending.
CapEx
$2.4B
Capital spending and related asset purchases.
FCF margin
-10.4%
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 | $5.4B | $1.0B | $2.2B | -$1.2B | -21.7% |
| 2023-03-31 | $6.2B | $1.2B | $2.3B | -$1.1B | -17.8% |
| 2023-06-30 | $5.3B | $1.3B | $2.4B | -$1.1B | -21.1% |
| 2023-09-30 | $5.9B | $1.8B | $2.4B | -$611.0M | -10.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -174.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 41.1% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$53.4B | 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 sequentially and year-over-year, providing the primary support for the reduction in the free cash flow deficit.
The improvement in operating cash flow was the key factor in narrowing the negative free cash flow.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased from the previous quarter and from the same quarter last year. Operating cash flow was higher than both comparison periods. Capital expenditure was stable versus the prior quarter but lower than a year ago. Consequently, free cash flow, while still negative, showed an improved margin.
Compared to the immediately preceding quarter, revenue and operating cash flow were higher, capital expenditure was unchanged, and free cash flow and its margin improved. Versus the same quarter one year earlier, revenue and operating cash flow were higher, capital expenditure was lower, and free cash flow and its margin also improved.
Monitor the level of capital expenditure, as it continues to exceed operating cash flow, sustaining a negative free cash flow.