Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Operating cash flow improved sharply versus the preceding quarter, lifting free cash flow and its margin. Compared to the same quarter last year, free cash flow and margin were lower, driven by higher capital expenditure.
- Revenue grew sequentially, and operating cash flow expanded more than proportionally, leading to a higher free cash flow margin. The conversion was stronger than the prior quarter but weaker than the prior year quarter due to a significant increase in capital expenditure relative to revenue.
- Compared to the immediately preceding quarter, revenue, operating cash flow, capital expenditure, free cash flow, and free cash flow margin all improved. Compared to the same quarter one year earlier, revenue and operating cash flow were higher, but capital expenditure was substantially higher, resulting in lower free cash flow and a lower free cash flow margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$32.9B
Trailing twelve-month free cash flow.
Quarter free cash flow
$17.8B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$45.6B
Cash generated by operations before capital spending.
CapEx
$27.8B
Capital spending and related asset purchases.
FCF margin
9.5%
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 |
|---|---|---|---|---|---|
| 2024-03-31 | $143.3B | $19.0B | $14.9B | $4.1B | 2.8% |
| 2024-06-30 | $148.0B | $25.3B | $17.6B | $7.7B | 5.2% |
| 2024-09-30 | $158.9B | $26.0B | $22.6B | $3.4B | 2.1% |
| 2024-12-31 | $187.8B | $45.6B | $27.8B | $17.8B | 9.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 89.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 14.8% | Lower capital intensity usually supports FCF margin. |
| Net cash | $20.8B | 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 Strength
Operating cash flow rose meaningfully from the prior quarter, contributing directly to sequential growth in free cash flow. The filing notes that operating cash flows primarily result from cash received from customers and other activities, offset by cash payments for products, services, compensation, and other operating costs.
Strong operating cash flow was the dominant observable driver of the quarter's free cash flow improvement versus the prior quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue grew sequentially, and operating cash flow expanded more than proportionally, leading to a higher free cash flow margin. The conversion was stronger than the prior quarter but weaker than the prior year quarter due to a significant increase in capital expenditure relative to revenue.
Compared to the immediately preceding quarter, revenue, operating cash flow, capital expenditure, free cash flow, and free cash flow margin all improved. Compared to the same quarter one year earlier, revenue and operating cash flow were higher, but capital expenditure was substantially higher, resulting in lower free cash flow and a lower free cash flow margin.
Monitor the trajectory of capital expenditure, as it was the primary factor reducing free cash flow relative to the prior year quarter.