Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Cash conversion weakened sharply in the current quarter, with free cash flow margin declining substantially from both the preceding quarter and the same quarter one year earlier. Revenue and operating cash flow were lower than both prior periods, while capital expenditure also decreased.
- Operating cash flow as a proportion of revenue was much lower than in the prior periods, resulting in a free cash flow margin that was a small fraction of the levels seen in the preceding quarter and the year-ago quarter. Capital expenditure, though lower, did not offset the decline in operating cash flow.
- Compared with the preceding quarter, revenue, operating cash flow, and free cash flow were all lower, and the free cash flow margin weakened markedly. Versus the same quarter one year earlier, revenue and operating cash flow were also lower, while capital expenditure decreased and free cash flow fell substantially.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$5.6B
Trailing twelve-month free cash flow.
Quarter free cash flow
$271.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$729.0M
Cash generated by operations before capital spending.
CapEx
$458.0M
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 |
|---|---|---|---|---|---|
| 2022-07-02 | $11.0B | $1.5B | $506.0M | $1.0B | 9.3% |
| 2022-10-01 | $10.7B | $1.9B | $547.0M | $1.4B | 13.0% |
| 2022-12-31 | $11.4B | $3.5B | $550.0M | $2.9B | 25.7% |
| 2023-04-01 | $10.7B | $729.0M | $458.0M | $271.0M | 2.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 21.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 4.3% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$31.6B | 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 significantly from both the preceding quarter and the same quarter one year earlier, while capital expenditure also declined but to a lesser extent. The filing notes a tax benefit from an intra-entity transaction and net investment losses in the current quarter, though no causal link to cash flow is asserted.
The reduction in operating cash flow drove free cash flow to a level well below both prior periods.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a proportion of revenue was much lower than in the prior periods, resulting in a free cash flow margin that was a small fraction of the levels seen in the preceding quarter and the year-ago quarter. Capital expenditure, though lower, did not offset the decline in operating cash flow.
Compared with the preceding quarter, revenue, operating cash flow, and free cash flow were all lower, and the free cash flow margin weakened markedly. Versus the same quarter one year earlier, revenue and operating cash flow were also lower, while capital expenditure decreased and free cash flow fell substantially.
Monitor the trajectory of operating cash flow, as its sharp decline was the primary factor behind the low free cash flow margin.