Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue declined from the prior quarter, and free cash flow margin weakened further. Operating cash flow improved slightly versus the prior quarter, but capital expenditure rose, leaving free cash flow lower.
- Revenue decreased while operating cash flow increased from the prior quarter, resulting in a higher operating cash flow margin. However, capital expenditure increased substantially, which reduced free cash flow and lowered the free cash flow margin compared to both the prior quarter and the same quarter last year.
- Compared to the immediately preceding quarter, revenue was lower, operating cash flow was slightly higher, capital expenditure was higher, and free cash flow was lower. Versus the same quarter one year earlier, revenue was higher, but operating cash flow, capital expenditure, and free cash flow were all lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$3.7B
Trailing twelve-month free cash flow.
Quarter free cash flow
$848.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$3.3B
Cash generated by operations before capital spending.
CapEx
$2.5B
Capital spending and related asset purchases.
FCF margin
3.6%
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 | $24.3B | $3.3B | $1.9B | $1.4B | 5.8% |
| 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% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 45.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 10.5% | Lower capital intensity usually supports FCF margin. |
| Net cash | $13.8B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Capital Expenditure Increase
Capital expenditure rose from both the prior quarter and the same quarter last year, outpacing the growth in operating cash flow. This was the strongest observable factor in the reduction of free cash flow.
Higher capital expenditure directly reduced free cash flow and compressed the free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue decreased while operating cash flow increased from the prior quarter, resulting in a higher operating cash flow margin. However, capital expenditure increased substantially, which reduced free cash flow and lowered the free cash flow margin compared to both the prior quarter and the same quarter last year.
Compared to the immediately preceding quarter, revenue was lower, operating cash flow was slightly higher, capital expenditure was higher, and free cash flow was lower. Versus the same quarter one year earlier, revenue was higher, but operating cash flow, capital expenditure, and free cash flow were all lower.
Monitor the magnitude of capital expenditure relative to operating cash flow, as higher spending in the current quarter absorbed a larger share of cash generation.