Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
The quarter's free cash flow was negative and weakened from both the prior quarter and the same quarter last year, as operating cash flow declined while capital expenditure increased. Revenue growth was offset by a much larger cash outflow from operations and investment.
- Cash conversion deteriorated sharply: revenue rose but operating cash flow fell significantly, while capital expenditure was higher. The resulting free cash flow margin turned more negative compared to both the prior quarter and the year-ago period.
- Compared to the prior quarter, free cash flow worsened markedly due to a lower operating cash flow and a slightly higher capital expenditure. Versus the same quarter last year, free cash flow also weakened, as operating cash flow was lower despite revenue growth.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$5.0B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$2.1B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$477.0M
Cash generated by operations before capital spending.
CapEx
$2.6B
Capital spending and related asset purchases.
FCF margin
-30.3%
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 | $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% |
| 2023-12-31 | $7.0B | $477.0M | $2.6B | -$2.1B | -30.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -231.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 37.1% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$50.3B | 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 Weakness
Operating cash flow fell sharply from both the prior quarter and the year-ago quarter, despite higher revenue. This was the largest observable factor behind the widening free cash flow deficit.
The operating cash flow decline directly caused free cash flow to become more negative, even as capital expenditure increased only modestly.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Cash conversion deteriorated sharply: revenue rose but operating cash flow fell significantly, while capital expenditure was higher. The resulting free cash flow margin turned more negative compared to both the prior quarter and the year-ago period.
Compared to the prior quarter, free cash flow worsened markedly due to a lower operating cash flow and a slightly higher capital expenditure. Versus the same quarter last year, free cash flow also weakened, as operating cash flow was lower despite revenue growth.
Monitor the trajectory of operating cash flow, which was the primary driver of the quarter's free cash flow decline.