Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned sharply positive in the current quarter, reversing a negative position from the prior quarter. The margin improved significantly from both the preceding and year-ago periods.
- Revenue was higher than both the preceding quarter and the same quarter a year earlier. Operating cash flow was strongly positive after a negative prior quarter, and capital expenditure increased slightly, resulting in free cash flow nearly matching year-ago levels while the margin rose relative to the prior quarter.
- Compared with the immediately preceding quarter, revenue, operating cash flow, free cash flow, and margin all improved, with operating cash flow rebounding from negative to positive. Versus the same quarter one year earlier, revenue was higher, but operating cash flow, free cash flow, and margin were lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$12.1B
Trailing twelve-month free cash flow.
Quarter free cash flow
$5.3B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$5.8B
Cash generated by operations before capital spending.
CapEx
$495.0M
Capital spending and related asset purchases.
FCF margin
53.1%
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 | $9.3B | $5.6B | $396.0M | $5.2B | 55.2% |
| 2024-06-30 | $9.8B | $4.5B | $565.0M | $4.0B | 40.4% |
| 2024-09-30 | $9.7B | -$1.8B | $455.0M | -$2.3B | -23.3% |
| 2024-12-31 | $10.0B | $5.8B | $495.0M | $5.3B | 53.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 243.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 5.0% | 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.
Operating Cash Flow Reversal
Operating cash flow moved from a negative level in the prior quarter to a positive level this quarter, driving a similar swing in free cash flow. The filing mentions that operating cash flows primarily include net income adjusted for non-cash items and changes in operating assets and liabilities, which can vary significantly.
The turnaround in operating cash flow was the primary factor behind the quarter-over-quarter improvement in free cash flow and margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher than both the preceding quarter and the same quarter a year earlier. Operating cash flow was strongly positive after a negative prior quarter, and capital expenditure increased slightly, resulting in free cash flow nearly matching year-ago levels while the margin rose relative to the prior quarter.
Compared with the immediately preceding quarter, revenue, operating cash flow, free cash flow, and margin all improved, with operating cash flow rebounding from negative to positive. Versus the same quarter one year earlier, revenue was higher, but operating cash flow, free cash flow, and margin were lower.
Monitor the sustainability of the positive shift in operating cash flow, which was the strongest observable driver this quarter.