Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was stable versus the prior quarter but lower than the same quarter one year earlier. Free cash flow turned positive from a negative position in the prior quarter, though it remained well below the year-ago level.
- Operating cash flow improved from the prior quarter, while capital expenditure increased slightly, resulting in a positive free cash flow margin. Compared with the year-ago quarter, operating cash flow was lower and capital expenditure was higher, leading to a much weaker free cash flow margin.
- Compared with the prior quarter, revenue was stable, operating cash flow was higher, and free cash flow improved from negative to positive. Compared with the same quarter one year earlier, revenue was lower, operating cash flow was lower, capital expenditure was higher, and free cash flow was substantially lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.6B
Trailing twelve-month free cash flow.
Quarter free cash flow
$442.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.9B
Cash generated by operations before capital spending.
CapEx
$1.5B
Capital spending and related asset purchases.
FCF margin
9.8%
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 |
|---|---|---|---|---|---|
| 2022-12-31 | $4.7B | $2.0B | $967.0M | $1.1B | 23.0% |
| 2023-03-31 | $4.4B | $1.2B | $982.0M | $178.0M | 4.1% |
| 2023-06-30 | $4.5B | $1.4B | $1.4B | -$47.0M | -1.0% |
| 2023-09-30 | $4.5B | $1.9B | $1.5B | $442.0M | 9.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 25.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 33.0% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$8.7B | 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 Pressure
Capital expenditure was higher than both the prior quarter and the year-ago quarter, as the company continued to invest in manufacturing capacity. This elevated spending constrained free cash flow despite improved operating cash flow.
The sustained high capital expenditure was the strongest observable factor weighing on free cash flow generation this quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow improved from the prior quarter, while capital expenditure increased slightly, resulting in a positive free cash flow margin. Compared with the year-ago quarter, operating cash flow was lower and capital expenditure was higher, leading to a much weaker free cash flow margin.
Compared with the prior quarter, revenue was stable, operating cash flow was higher, and free cash flow improved from negative to positive. Compared with the same quarter one year earlier, revenue was lower, operating cash flow was lower, capital expenditure was higher, and free cash flow was substantially lower.
Monitor the trajectory of capital expenditure, which remained elevated relative to the year-ago quarter and absorbed a significant portion of operating cash flow.