Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue, operating cash flow, and free cash flow all improved compared to the prior quarter. Free cash flow turned positive versus the same quarter last year, driven by higher operating cash flow relative to capital expenditure.
- Operating cash flow as a share of revenue was higher than both the prior quarter and the year-ago quarter. Capital expenditure increased from both comparison periods, but free cash flow margin strengthened from negative to positive year-over-year and improved sequentially.
- Compared to the immediately preceding quarter, revenue, operating cash flow, and free cash flow were all higher, and free cash flow margin improved. Relative to the same quarter one year earlier, revenue was lower, operating cash flow was higher, capital expenditure was higher, and free cash flow turned from negative to positive.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$2.0B
Trailing twelve-month free cash flow.
Quarter free cash flow
$177.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$2.8B
Cash generated by operations before capital spending.
CapEx
$2.7B
Capital spending and related asset purchases.
FCF margin
2.5%
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 | $7.0B | $1.3B | $2.4B | -$1.1B | -16.1% |
| 2023-03-31 | $6.5B | $844.0M | $1.9B | -$1.0B | -15.5% |
| 2023-06-30 | $5.7B | $2.1B | $2.0B | $8.0M | 0.1% |
| 2023-09-30 | $7.0B | $2.8B | $2.7B | $177.0M | 2.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 12.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 38.2% | 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.
Operating Cash Flow Strength
Operating cash flow increased substantially from both the prior quarter and the year-ago quarter, which was the main factor behind the improvement in free cash flow.
Higher operating cash flow drove free cash flow into positive territory this quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a share of revenue was higher than both the prior quarter and the year-ago quarter. Capital expenditure increased from both comparison periods, but free cash flow margin strengthened from negative to positive year-over-year and improved sequentially.
Compared to the immediately preceding quarter, revenue, operating cash flow, and free cash flow were all higher, and free cash flow margin improved. Relative to the same quarter one year earlier, revenue was lower, operating cash flow was higher, capital expenditure was higher, and free cash flow turned from negative to positive.
Monitor capital expenditure level relative to operating cash flow, as the gap between them narrowed this quarter but remains large in absolute terms.