Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned negative in the current quarter, driven by lower operating cash flow relative to a slightly lower revenue. Capital expenditure was higher than both the prior quarter and the same period last year.
- Revenue was stable versus the preceding quarter and higher year-over-year, but operating cash flow dropped sharply, leading to a negative free cash flow after subtracting elevated capital expenditure. Free cash flow margin weakened substantially compared with both prior periods.
- Compared with the immediately preceding quarter, operating cash flow fell from positive to a much lower level, and free cash flow swung from positive to negative. Versus the same quarter one year earlier, operating cash flow also decreased, while capital expenditure increased, deepening the free cash flow deficit.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$12.7B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$4.6B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$813.0M
Cash generated by operations before capital spending.
CapEx
$5.5B
Capital spending and related asset purchases.
FCF margin
-2.9%
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 |
|---|---|---|---|---|---|
| 2023-01-31 | $162.7B | $13.1B | $4.8B | $8.3B | 5.1% |
| 2023-04-30 | $151.0B | $4.6B | $4.4B | $204.0M | 0.1% |
| 2023-07-31 | $160.3B | $13.6B | $4.8B | $8.8B | 5.5% |
| 2023-10-31 | $159.4B | $813.0M | $5.5B | -$4.6B | -2.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -1025.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.4% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$27.0B | 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 Decline
Operating cash flow was substantially lower than both the preceding quarter and the year-ago quarter, despite revenue being higher year-over-year. This was the main observable factor behind the negative free cash flow.
The sharp drop in operating cash flow outweighed the moderate revenue increase, turning free cash flow negative.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was stable versus the preceding quarter and higher year-over-year, but operating cash flow dropped sharply, leading to a negative free cash flow after subtracting elevated capital expenditure. Free cash flow margin weakened substantially compared with both prior periods.
Compared with the immediately preceding quarter, operating cash flow fell from positive to a much lower level, and free cash flow swung from positive to negative. Versus the same quarter one year earlier, operating cash flow also decreased, while capital expenditure increased, deepening the free cash flow deficit.
Monitor the magnitude of capital expenditure relative to operating cash flow, as the gap between them expanded significantly this quarter.