Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue declined compared to both the prior quarter and the same quarter last year. Operating cash flow and free cash flow also decreased, while capital expenditure rose, resulting in a lower free cash flow margin.
- With lower revenue and operating cash flow, combined with higher capital expenditure, the conversion of revenue into free cash flow weakened. The free cash flow margin contracted as a result.
- Compared to the prior quarter, revenue, operating cash flow, free cash flow, and margin all declined, while capital expenditure increased. Relative to the same quarter last year, revenue and operating cash flow were lower, capital expenditure was higher, and free cash flow and margin weakened.
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
$944.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$2.2B
Cash generated by operations before capital spending.
CapEx
$1.3B
Capital spending and related asset purchases.
FCF margin
4.5%
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 |
|---|---|---|---|---|---|
| 2022-12-31 | $27.0B | $3.3B | $2.5B | $841.0M | 3.1% |
| 2023-03-31 | $22.9B | $2.4B | $609.0M | $1.7B | 7.6% |
| 2023-06-30 | $22.1B | $3.2B | $1.2B | $2.0B | 9.2% |
| 2023-09-30 | $21.1B | $2.2B | $1.3B | $944.0M | 4.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 83.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 6.1% | Lower capital intensity usually supports FCF margin. |
| Net cash | n/a | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Cash conversion pressure
The decline in operating cash flow, together with a rise in capital expenditure, drove free cash flow lower and compressed the margin. This represents the most observable shift in the quarter's cash generation profile.
If capital expenditure continues to outpace operating cash flow, free cash flow may remain under pressure.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
With lower revenue and operating cash flow, combined with higher capital expenditure, the conversion of revenue into free cash flow weakened. The free cash flow margin contracted as a result.
Compared to the prior quarter, revenue, operating cash flow, free cash flow, and margin all declined, while capital expenditure increased. Relative to the same quarter last year, revenue and operating cash flow were lower, capital expenditure was higher, and free cash flow and margin weakened.
Monitor the trend of capital expenditure relative to operating cash flow, as it has increased while cash generation has declined.