Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow was minimal despite substantial revenue, as operating cash flow was nearly offset by capital expenditure. The cash conversion margin weakened sharply compared to both the prior quarter and the same quarter last year.
- Revenue was high, but operating cash flow was low relative to revenue, and capital expenditure consumed most of it, leaving free cash flow near zero. The free cash flow margin was very thin, indicating a low rate of revenue conversion into free cash flow.
- Compared to the prior quarter, revenue, operating cash flow, free cash flow, and free cash flow margin all were lower. Versus the same quarter one year earlier, all four metrics also were lower, with free cash flow and margin showing the largest relative decline.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$20.2B
Trailing twelve-month free cash flow.
Quarter free cash flow
$73.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.2B
Cash generated by operations before capital spending.
CapEx
$1.1B
Capital spending and related asset purchases.
FCF margin
0.4%
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 |
|---|---|---|---|---|---|
| 2022-07-03 | $27.7B | $8.2B | $751.0M | $7.4B | 26.7% |
| 2022-10-02 | $22.6B | $6.0B | $841.0M | $5.1B | 22.7% |
| 2022-12-31 | $25.1B | $8.6B | $1.0B | $7.6B | 30.2% |
| 2023-04-02 | $18.5B | $1.2B | $1.1B | $73.0M | 0.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 1.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 6.2% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$33.7B | 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 compression
Operating cash flow was substantially lower than both the prior quarter and the year-ago quarter, while capital expenditure remained elevated relative to operating cash flow. This combination drove free cash flow to a minimal level.
The free cash flow margin contracted to a very low level, reflecting a weakened ability to generate discretionary cash from revenue.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was high, but operating cash flow was low relative to revenue, and capital expenditure consumed most of it, leaving free cash flow near zero. The free cash flow margin was very thin, indicating a low rate of revenue conversion into free cash flow.
Compared to the prior quarter, revenue, operating cash flow, free cash flow, and free cash flow margin all were lower. Versus the same quarter one year earlier, all four metrics also were lower, with free cash flow and margin showing the largest relative decline.
Monitor whether operating cash flow can recover to a level that more comfortably covers capital expenditure in future quarters.