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 and the same quarter last year. The free cash flow margin strengthened significantly over both comparison periods.
- Operating cash flow as a proportion of revenue improved, and lower capital expenditure relative to the prior quarter supported a higher free cash flow conversion. The free cash flow margin increased from both the preceding quarter and the year-ago quarter.
- Compared to the prior quarter, revenue, operating cash flow, and free cash flow were all higher, while capital expenditure was lower. Versus the same quarter last year, revenue was slightly higher, operating cash flow and free cash flow were markedly higher, and capital expenditure was higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$4.4B
Trailing twelve-month free cash flow.
Quarter free cash flow
$2.1B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$4.4B
Cash generated by operations before capital spending.
CapEx
$2.3B
Capital spending and related asset purchases.
FCF margin
8.2%
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 |
|---|---|---|---|---|---|
| 2023-03-31 | $23.3B | $2.5B | $2.1B | $441.0M | 1.9% |
| 2023-06-30 | $24.9B | $3.1B | $2.1B | $1.0B | 4.0% |
| 2023-09-30 | $23.4B | $3.3B | $2.5B | $848.0M | 3.6% |
| 2023-12-31 | $25.2B | $4.4B | $2.3B | $2.1B | 8.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 26.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 9.2% | Lower capital intensity usually supports FCF margin. |
| Net cash | $13.7B | 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 improved sequentially and year-over-year, outpacing the change in revenue. This was the strongest observable driver of the higher free cash flow.
The increase in operating cash flow, combined with a sequential reduction in capital expenditure, resulted in a substantially higher free cash flow margin.
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 improved, and lower capital expenditure relative to the prior quarter supported a higher free cash flow conversion. The free cash flow margin increased from both the preceding quarter and the year-ago quarter.
Compared to the prior quarter, revenue, operating cash flow, and free cash flow were all higher, while capital expenditure was lower. Versus the same quarter last year, revenue was slightly higher, operating cash flow and free cash flow were markedly higher, and capital expenditure was higher.
Monitor the trend in capital expenditure, which was lower sequentially but higher year-over-year.