Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue declined from the prior quarter and was slightly lower than a year earlier. Operating cash flow and free cash flow turned negative, causing a significant weakening in the free cash flow margin.
- Revenue decreased while operating cash flow swung from a positive to a large negative amount, and capital expenditure was higher than in both comparison periods. The result was negative free cash flow and a free cash flow margin that worsened sharply, indicating poor cash conversion relative to revenue.
- Compared to the prior quarter, revenue, operating cash flow, and free cash flow all decreased substantially, with operating cash flow turning from positive to negative. Versus the same quarter a year ago, revenue was slightly lower, but operating cash flow and free cash flow were more negative, indicating a weaker cash generation position.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.3B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$3.9B
Free cash flow in the selected fiscal quarter.
Operating cash flow
-$3.4B
Cash generated by operations before capital spending.
CapEx
$567.0M
Capital spending and related asset purchases.
FCF margin
-23.7%
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 | $19.8B | $2.9B | $296.0M | $2.6B | 13.1% |
| 2023-09-30 | $18.1B | $22.0M | $332.0M | -$310.0M | -1.7% |
| 2023-12-31 | $22.0B | $3.4B | $431.0M | $3.0B | 13.4% |
| 2024-03-31 | $16.6B | -$3.4B | $567.0M | -$3.9B | -23.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 1145.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.4% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$40.8B | 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 Deterioration
The most prominent observable change is the shift in operating cash flow from a positive amount in the prior quarter to a large negative amount in the current quarter, while capital expenditure increased modestly. This drove free cash flow deeply negative.
The negative free cash flow margin highlights that core operations are not generating enough cash to cover capital spending, which may pressure liquidity.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue decreased while operating cash flow swung from a positive to a large negative amount, and capital expenditure was higher than in both comparison periods. The result was negative free cash flow and a free cash flow margin that worsened sharply, indicating poor cash conversion relative to revenue.
Compared to the prior quarter, revenue, operating cash flow, and free cash flow all decreased substantially, with operating cash flow turning from positive to negative. Versus the same quarter a year ago, revenue was slightly lower, but operating cash flow and free cash flow were more negative, indicating a weaker cash generation position.
Monitor the trajectory of operating cash flow, as it has moved from positive to negative and is now substantially below the year-ago level.