Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
In the quarter, cash generation improved sequentially driven by higher operating cash flow, though both revenue and free cash flow were lower than the same period a year ago. The free cash flow margin strengthened compared to the prior quarter but weakened against the year-ago period.
- Revenue conversion into operating cash flow improved sequentially, with operating cash flow rising more than revenue. Capital expenditure was higher than the prior quarter but stable relative to the year-ago quarter, allowing free cash flow to increase from the previous period.
- Compared to the immediately preceding quarter, revenue, operating cash flow, free cash flow, and margin all improved. Relative to the same quarter one year earlier, all key metrics were lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$4.8B
Trailing twelve-month free cash flow.
Quarter free cash flow
$4.2B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$5.2B
Cash generated by operations before capital spending.
CapEx
$1.0B
Capital spending and related asset purchases.
FCF margin
28.8%
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 |
|---|---|---|---|---|---|
| 2023-04-02 | $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% |
| 2023-12-31 | $14.6B | $5.2B | $1.0B | $4.2B | 28.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -124.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 7.2% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$69.0B | 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 from the prior quarter, becoming the strongest contributor to the sequential rise in free cash flow. The company focuses on optimizing working capital efficiencies to support operating cash flows.
Higher operating cash flow directly improved free cash flow and margin this quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue conversion into operating cash flow improved sequentially, with operating cash flow rising more than revenue. Capital expenditure was higher than the prior quarter but stable relative to the year-ago quarter, allowing free cash flow to increase from the previous period.
Compared to the immediately preceding quarter, revenue, operating cash flow, free cash flow, and margin all improved. Relative to the same quarter one year earlier, all key metrics were lower.
Monitor whether the sequential improvement in operating cash flow can sustain given the year-over-year decline in revenue.