What stands out

Capital spending is outpacing cash generation. Capital spending rose 72.8% over the year, while operating cash flow grew by 18.8%. This gap means less of the cash generated by operations was left over after investment.

Sales are rising faster than profits. Revenue increased by 8.3%, but the operating margin fell 1.4 percentage points. The company is generating more sales, yet each dollar of revenue yields less profit than before.

Growth and profit

Revenue over the twelve months to Q3 2026 reached $103.57 billion. This figure represents an 8.3% increase compared to the year before. The trailing gross margin stood at 19.3%.

Profitability has compressed despite revenue growth. The trailing operating margin was 3.3%, down 1.4 percentage points from a year earlier. The trailing net margin was 3.1%.

Net income over the twelve months was $3.22 billion. This amount fell 36.7% on the year before. The decline in net income contrasts with the rise in revenue, showing that costs grew faster than sales.

Cash flow

Operating cash flow over the twelve months was $18.71 billion. This figure is up 18.8% on the year before. Capital spending was $15.41 billion, which equals 14.9% of revenue.

Free cash flow, defined as operating cash flow less capital spending, was $3.30 billion. This amount is down 51.7% on the year before. The free-cash-flow margin was 3.2% of revenue, down 4.0 percentage points from a year earlier.

The average diluted share count rose 0.5% over the year. This slight increase in share count occurs alongside the sharp drop in free cash flow.

In context

Today’s free-cash-flow margin of 3.2% is higher than 56% of the company’s own past quarterly readings. Historical readings have ranged from −331.6% to 11.9%.

Today’s operating margin of 3.3% is higher than 60% of the company’s own past quarterly readings. Historical readings have ranged from −262.7% to 16.8%.

Today’s twelve-month revenue growth rate of 8.3% is higher than 19% of the company’s own past quarterly readings. Historical readings have ranged from −27.3% to 1065.2%.

What it means for value

Our model shows high sensitivity to growth assumptions. If growth is 5 percentage points lower, the value lowers by 17.5%. If growth is 5 percentage points higher, the value rises by 22.7%.

The model also shows sensitivity to cash margins. A free-cash-flow margin 1 percentage point lower would lower the value by 20.4%.

What to watch

The next filing will show whether capital spending continues to outpace operating cash flow. It will also reveal if the operating margin stabilizes or continues to decline relative to revenue growth. Investors should look for changes in the free-cash-flow margin to see if the gap between cash generation and investment narrows.