Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue and operating cash flow were higher compared to both the prior quarter and the same quarter last year, while free cash flow margin weakened due to a larger increase in capital expenditure. The company's cash conversion efficiency declined slightly.
- Revenue and operating cash flow increased, but capital expenditure grew faster, resulting in a lower free cash flow margin relative to both the preceding quarter and the year-ago period.
- Sequentially, revenue was slightly higher, operating cash flow stable, capital expenditure higher, and free cash flow lower. Year over year, revenue, operating cash flow, and free cash flow were all higher, but free cash flow margin was lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$7.6B
Trailing twelve-month free cash flow.
Quarter free cash flow
$3.0B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$3.4B
Cash generated by operations before capital spending.
CapEx
$371.0M
Capital spending and related asset purchases.
FCF margin
33.3%
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 |
|---|---|---|---|---|---|
| 2022-12-31 | $8.2B | $3.1B | $347.0M | $2.7B | 33.7% |
| 2023-03-31 | $8.0B | -$955.0M | $279.0M | -$1.2B | -15.4% |
| 2023-06-30 | $9.0B | $3.4B | $360.0M | $3.1B | 34.4% |
| 2023-09-30 | $9.1B | $3.4B | $371.0M | $3.0B | 33.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 148.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 4.1% | Lower capital intensity usually supports FCF margin. |
| Net cash | n/a | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Revenue Growth
Revenue increased both sequentially and year over year, supporting higher operating cash flow. This was the strongest observable factor driving cash generation.
The higher revenue enabled the company to generate increased free cash flow compared to the same quarter last year, despite a higher capital expenditure outlay.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue and operating cash flow increased, but capital expenditure grew faster, resulting in a lower free cash flow margin relative to both the preceding quarter and the year-ago period.
Sequentially, revenue was slightly higher, operating cash flow stable, capital expenditure higher, and free cash flow lower. Year over year, revenue, operating cash flow, and free cash flow were all higher, but free cash flow margin was lower.
Monitor the trend in capital expenditure, which increased relative to both the prior quarter and the same quarter one year earlier.