Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Operating cash flow improved sequentially and revenue rose, yet free cash flow was unchanged because capital spending increased. Compared with a year ago, free cash flow declined despite higher revenue, as operating cash flow weakened and capital spending decreased less than the drop in operating cash flow.
- Revenue increased from both the prior quarter and the year-ago quarter. Operating cash flow was higher sequentially but lower than a year earlier. Capital expenditure rose versus the prior quarter but fell from the year-ago period. Free cash flow matched the prior quarter's level but was below the year-ago level, and the free cash flow margin narrowed relative to both periods.
- Sequentially, revenue and operating cash flow were higher, while the free cash flow margin was lower due to increased capital spending. Year-over-year, revenue was higher, but operating cash flow, free cash flow, and margin were all lower, with capital spending also lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$6.4B
Trailing twelve-month free cash flow.
Quarter free cash flow
$2.1B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$2.9B
Cash generated by operations before capital spending.
CapEx
$720.0M
Capital spending and related asset purchases.
FCF margin
19.6%
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 |
|---|---|---|---|---|---|
| 2024-03-31 | $10.0B | $1.0B | $398.0M | $627.0M | 6.3% |
| 2024-06-30 | $10.4B | $2.0B | $533.0M | $1.4B | 13.8% |
| 2024-09-30 | $10.6B | $2.7B | $556.0M | $2.1B | 20.2% |
| 2024-12-31 | $11.0B | $2.9B | $720.0M | $2.1B | 19.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 23.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 6.6% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$6.5B | 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 vs. Capital Expenditure
The strongest observable driver of the free cash flow outcome was the increase in capital expenditure relative to operating cash flow. Sequentially, capital spending rose while operating cash flow increased less, resulting in stable free cash flow. Year-over-year, operating cash flow declined and capital spending also fell, but not enough to offset the drop in operating cash generation.
The free cash flow margin weakened both sequentially and year-over-year, reflecting a less efficient conversion of revenue into free cash flow.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased from both the prior quarter and the year-ago quarter. Operating cash flow was higher sequentially but lower than a year earlier. Capital expenditure rose versus the prior quarter but fell from the year-ago period. Free cash flow matched the prior quarter's level but was below the year-ago level, and the free cash flow margin narrowed relative to both periods.
Sequentially, revenue and operating cash flow were higher, while the free cash flow margin was lower due to increased capital spending. Year-over-year, revenue was higher, but operating cash flow, free cash flow, and margin were all lower, with capital spending also lower.
Monitor the relationship between operating cash flow and capital expenditure, as a higher level of spending relative to cash from operations compressed the free cash flow margin sequentially.