Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
In the current quarter, the company generated positive free cash flow, a significant improvement from the prior quarter's negative result. However, free cash flow and revenue were lower compared to the same quarter last year.
- Operating cash flow turned positive, reversing the prior quarter's outflow, which drove the improvement in free cash flow despite a slightly lower capital expenditure. The free cash flow margin also returned to positive territory.
- Compared to the preceding quarter, revenue, operating cash flow, free cash flow, and margin all improved, with cash flow metrics shifting from negative to positive. Versus the same quarter a year ago, all metrics were lower, reflecting a weaker cash conversion performance.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$8.2B
Trailing twelve-month free cash flow.
Quarter free cash flow
$2.6B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$3.5B
Cash generated by operations before capital spending.
CapEx
$810.0M
Capital spending and related asset purchases.
FCF margin
19.6%
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 | $25.1B | $8.6B | $1.0B | $7.6B | 30.2% |
| 2023-04-02 | $18.5B | $1.2B | $1.1B | $73.0M | 0.4% |
| 2023-07-02 | $13.0B | -$1.2B | $914.0M | -$2.1B | -16.3% |
| 2023-10-01 | $13.5B | $3.5B | $810.0M | $2.6B | 19.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -111.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 6.0% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$60.4B | 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 Recovery
The most notable observable driver was the turnaround in operating cash flow from a negative to a positive amount, which directly enabled the positive free cash flow. This improvement occurred even as revenue was relatively stable quarter over quarter.
This recovery provides the company with increased internal funding capacity, supporting its ongoing business development initiatives as disclosed in the filing.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow turned positive, reversing the prior quarter's outflow, which drove the improvement in free cash flow despite a slightly lower capital expenditure. The free cash flow margin also returned to positive territory.
Compared to the preceding quarter, revenue, operating cash flow, free cash flow, and margin all improved, with cash flow metrics shifting from negative to positive. Versus the same quarter a year ago, all metrics were lower, reflecting a weaker cash conversion performance.
Monitor whether operating cash flow can sustain its positive trajectory, as it is the primary driver of free cash flow generation.