Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow and margin weakened significantly compared to both the prior quarter and the same quarter last year, driven by a sharp decline in operating cash flow. Revenue was slightly lower than both comparison periods, while capital expenditure remained broadly stable.
- Operating cash flow converted into free cash flow at a lower rate than the previous quarter and the year-ago quarter, as capital expenditure was roughly similar while operating cash flow fell substantially. The free cash flow margin narrowed accordingly.
- Compared to the prior quarter, revenue was slightly lower, operating cash flow was much lower, and free cash flow was lower, leading to a weaker margin. Versus the same quarter one year ago, revenue was slightly lower, operating cash flow was lower, and free cash flow was lower, with a weaker margin as well.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$14.7B
Trailing twelve-month free cash flow.
Quarter free cash flow
$2.0B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$4.7B
Cash generated by operations before capital spending.
CapEx
$2.7B
Capital spending and related asset purchases.
FCF margin
6.7%
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 |
|---|---|---|---|---|---|
| 2023-09-30 | $30.1B | $8.2B | $3.3B | $4.9B | 16.1% |
| 2023-12-31 | $31.3B | $5.9B | $3.3B | $2.6B | 8.3% |
| 2024-03-31 | $30.1B | $7.8B | $2.6B | $5.2B | 17.4% |
| 2024-06-30 | $29.7B | $4.7B | $2.7B | $2.0B | 6.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 50.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 9.2% | 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.
Operating Cash Flow Decline
Operating cash flow in the current quarter was substantially lower than both the immediate prior quarter and the same quarter one year earlier, while capital expenditure remained relatively steady. This resulted in a marked reduction in free cash flow and margin.
The weaker operating cash flow directly reduced free cash flow and margin, and this trend warrants continued observation.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow converted into free cash flow at a lower rate than the previous quarter and the year-ago quarter, as capital expenditure was roughly similar while operating cash flow fell substantially. The free cash flow margin narrowed accordingly.
Compared to the prior quarter, revenue was slightly lower, operating cash flow was much lower, and free cash flow was lower, leading to a weaker margin. Versus the same quarter one year ago, revenue was slightly lower, operating cash flow was lower, and free cash flow was lower, with a weaker margin as well.
Monitor the trajectory of operating cash flow, as its decline was the primary factor behind the weakened free cash flow generation.