Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
In the first quarter of fiscal 2024, the company reported strong free cash flow generation, driven by a significant increase in operating cash flow relative to the prior-year quarter. Revenue was marginally lower compared to the immediate prior quarter, but operating cash flow and free cash flow improved markedly year-over-year.
- Revenue was lower than the prior quarter but higher than the same quarter a year earlier. Operating cash flow, despite being lower than the preceding quarter, substantially exceeded the level from one year ago. Capital expenditure was slightly below both comparison periods. Free cash flow and free cash flow margin followed the same pattern: lower than the previous quarter but significantly improved from the year-ago period, where the margin was negative.
- Compared to the prior quarter, revenue, operating cash flow, free cash flow, and free cash flow margin all decreased, while capital expenditure was slightly lower. Versus the same quarter last year, all metrics were substantially higher, with operating cash flow and free cash flow shifting from negative to positive.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$22.9B
Trailing twelve-month free cash flow.
Quarter free cash flow
$5.2B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$5.6B
Cash generated by operations before capital spending.
CapEx
$396.0M
Capital spending and related asset purchases.
FCF margin
55.2%
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 | $9.4B | $3.9B | $376.0M | $3.5B | 37.6% |
| 2023-09-30 | $9.4B | $8.2B | $401.0M | $7.8B | 83.6% |
| 2023-12-31 | $9.6B | $6.8B | $426.0M | $6.3B | 66.3% |
| 2024-03-31 | $9.3B | $5.6B | $396.0M | $5.2B | 55.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 211.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 4.2% | Lower capital intensity usually supports FCF margin. |
| Net cash | n/a | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Year-over-Year Operating Cash Flow Recovery
Operating cash flow moved from negative in the year-ago quarter to a substantial positive figure in the current quarter, representing the most significant observable change among supplied metrics.
This improvement drove the free cash flow margin from negative to positive, marking a fundamental shift in cash generation relative to the prior year.
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 but higher than the same quarter a year earlier. Operating cash flow, despite being lower than the preceding quarter, substantially exceeded the level from one year ago. Capital expenditure was slightly below both comparison periods. Free cash flow and free cash flow margin followed the same pattern: lower than the previous quarter but significantly improved from the year-ago period, where the margin was negative.
Compared to the prior quarter, revenue, operating cash flow, free cash flow, and free cash flow margin all decreased, while capital expenditure was slightly lower. Versus the same quarter last year, all metrics were substantially higher, with operating cash flow and free cash flow shifting from negative to positive.
Monitor whether the free cash flow margin can sustain its positive level in subsequent quarters, given it fell from the prior quarter but was a strong reversal from the prior-year negative margin.