Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue and operating cash flow were higher than the prior quarter but lower than the same quarter last year. Free cash flow and free cash flow margin weakened compared to both the preceding quarter and the year-ago quarter.
- Operating cash flow was higher than capital expenditure, yielding positive free cash flow, though the free cash flow margin was low relative to revenue. The conversion from operating cash flow to free cash flow was constrained by capital expenditure that consumed most of the operating cash flow.
- Compared to the prior quarter, revenue improved while free cash flow and free cash flow margin weakened. Versus the same quarter one year earlier, revenue, operating cash flow, free cash flow, and free cash flow margin were all lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$5.1B
Trailing twelve-month free cash flow.
Quarter free cash flow
$362.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$2.4B
Cash generated by operations before capital spending.
CapEx
$2.0B
Capital spending and related asset purchases.
FCF margin
1.5%
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 |
|---|---|---|---|---|---|
| 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% |
| 2023-12-31 | $24.9B | $2.4B | $2.0B | $362.0M | 1.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 22.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 8.2% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$18.8B | 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 Pressure
Capital expenditure was higher than the prior quarter and nearly as high as operating cash flow, resulting in the lowest free cash flow among the three periods shown. This was the strongest observable driver of the weakened free cash flow.
The elevated capital expenditure relative to operating cash flow directly reduced free cash flow and the 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 was higher than capital expenditure, yielding positive free cash flow, though the free cash flow margin was low relative to revenue. The conversion from operating cash flow to free cash flow was constrained by capital expenditure that consumed most of the operating cash flow.
Compared to the prior quarter, revenue improved while free cash flow and free cash flow margin weakened. Versus the same quarter one year earlier, revenue, operating cash flow, free cash flow, and free cash flow margin were all lower.
Monitor the relationship between operating cash flow and capital expenditure, as capital expenditure remained elevated relative to operating cash flow, compressing free cash flow.