Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned positive compared to a deficit one year earlier, driven by higher operating cash flow. However, it decreased substantially from the prior quarter as revenue and operating cash flow declined sequentially.
- Revenue was lower than the prior quarter, and operating cash flow decreased even more sharply, resulting in a much lower free cash flow margin. Capital expenditure was slightly higher than both the preceding quarter and the year-ago period, limiting cash conversion.
- Compared with the immediately preceding quarter, revenue, operating cash flow, and free cash flow all weakened, and the free cash flow margin contracted. Relative to the same quarter one year earlier, revenue and operating cash flow improved, free cash flow turned positive from negative, and the margin shifted from negative to positive.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$45.7B
Trailing twelve-month free cash flow.
Quarter free cash flow
$4.1B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$19.0B
Cash generated by operations before capital spending.
CapEx
$14.9B
Capital spending and related asset purchases.
FCF margin
2.8%
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 |
|---|---|---|---|---|---|
| 2023-06-30 | $134.4B | $16.5B | $11.5B | $5.0B | 3.7% |
| 2023-09-30 | $143.1B | $21.2B | $12.5B | $8.7B | 6.1% |
| 2023-12-31 | $170.0B | $42.5B | $14.6B | $27.9B | 16.4% |
| 2024-03-31 | $143.3B | $19.0B | $14.9B | $4.1B | 2.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 39.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 10.4% | Lower capital intensity usually supports FCF margin. |
| Net cash | $6.0B | 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 turnaround
Operating cash flow increased sharply from the same quarter last year, lifting free cash flow into positive territory. This was the strongest observable driver of the year-over-year improvement.
The year-over-year swing in free cash flow was entirely attributable to higher operating cash flow, with capital expenditure remaining relatively stable.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was lower than the prior quarter, and operating cash flow decreased even more sharply, resulting in a much lower free cash flow margin. Capital expenditure was slightly higher than both the preceding quarter and the year-ago period, limiting cash conversion.
Compared with the immediately preceding quarter, revenue, operating cash flow, and free cash flow all weakened, and the free cash flow margin contracted. Relative to the same quarter one year earlier, revenue and operating cash flow improved, free cash flow turned positive from negative, and the margin shifted from negative to positive.
Monitor the level of capital expenditure relative to operating cash flow, as it remained elevated and absorbed a significant portion of cash generation.