Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue and operating cash flow increased both sequentially and year over year, leading to higher free cash flow. Free cash flow margin improved from the prior quarter but was slightly lower than the same quarter last year due to higher capital expenditure.
- The company converted a higher proportion of revenue into operating cash flow, with operating cash flow growing faster than revenue. Capital expenditure was lower than the prior quarter but higher than the prior year, resulting in a free cash flow margin that improved from the previous quarter while remaining near the level of the year-ago period.
- Compared to the preceding quarter, revenue, operating cash flow, and free cash flow were all higher, and the free cash flow margin improved. Compared to the same quarter one year earlier, revenue and operating cash flow were higher, and free cash flow was higher, but the free cash flow margin was slightly lower as capital expenditure increased significantly.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.7B
Trailing twelve-month free cash flow.
Quarter free cash flow
$2.4B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$3.8B
Cash generated by operations before capital spending.
CapEx
$1.4B
Capital spending and related asset purchases.
FCF margin
16.8%
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 |
|---|---|---|---|---|---|
| 2022-09-30 | $12.9B | $741.0M | $1.3B | -$587.0M | -4.6% |
| 2022-12-31 | $12.4B | $1.2B | $2.5B | -$1.4B | -11.1% |
| 2023-03-31 | $11.4B | $3.1B | $1.8B | $1.3B | 11.4% |
| 2023-06-30 | $14.2B | $3.8B | $1.4B | $2.4B | 16.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 221.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 10.0% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$20.7B | 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 Growth
Operating cash flow increased both sequentially and year over year, outpacing revenue growth. This drove higher free cash flow despite a notable increase in capital expenditure from the prior year.
The strong operating cash flow generation supported the company's ability to invest in capital assets while still increasing free cash flow.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
The company converted a higher proportion of revenue into operating cash flow, with operating cash flow growing faster than revenue. Capital expenditure was lower than the prior quarter but higher than the prior year, resulting in a free cash flow margin that improved from the previous quarter while remaining near the level of the year-ago period.
Compared to the preceding quarter, revenue, operating cash flow, and free cash flow were all higher, and the free cash flow margin improved. Compared to the same quarter one year earlier, revenue and operating cash flow were higher, and free cash flow was higher, but the free cash flow margin was slightly lower as capital expenditure increased significantly.
Monitor the trend in capital expenditure, which increased from the prior year and may affect future free cash flow margins.