Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow margin weakened significantly this quarter as operating cash flow fell more than revenue. Capital expenditure remained relatively stable, amplifying the decline in free cash flow.
- Revenue decreased compared to the prior quarter, while operating cash flow declined at a steeper rate. Capital expenditure increased slightly, and free cash flow margin fell substantially.
- Compared to the immediately preceding quarter, free cash flow was lower and margin weakened. Versus the same quarter one year earlier, both revenue and free cash flow were lower, with margin also lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$6.9B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.0B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.5B
Cash generated by operations before capital spending.
CapEx
$453.0M
Capital spending and related asset purchases.
FCF margin
10.8%
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 |
|---|---|---|---|---|---|
| 2022-06-26 | $10.9B | $2.9B | $554.0M | $2.3B | 21.4% |
| 2022-09-25 | $11.4B | $1.4B | $634.0M | $812.0M | 7.1% |
| 2022-12-25 | $9.5B | $3.1B | $398.0M | $2.7B | 28.5% |
| 2023-03-26 | $9.3B | $1.5B | $453.0M | $1.0B | 10.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 58.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 4.9% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$12.0B | 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 Decline
Operating cash flow decreased more than revenue on a sequential and year-over-year basis, driving the compression in free cash flow margin.
If operating cash flow continues to decline relative to revenue, free cash flow generation may remain under pressure.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue decreased compared to the prior quarter, while operating cash flow declined at a steeper rate. Capital expenditure increased slightly, and free cash flow margin fell substantially.
Compared to the immediately preceding quarter, free cash flow was lower and margin weakened. Versus the same quarter one year earlier, both revenue and free cash flow were lower, with margin also lower.
Monitor the trend in operating cash flow as a proportion of revenue, given the company's reliance on operational cash flows for liquidity.