Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow remained stable versus the same quarter last year despite a higher revenue base, while the sequential quarter saw a significant decline driven by lower operating cash flow. The free cash flow margin weakened from both comparison periods, reflecting a less efficient conversion of revenue into free cash flow.
- Operating cash flow exceeded capital expenditure by a wide margin, producing positive free cash flow. However, the free cash flow margin was lower than the prior quarter and the year-ago quarter, indicating that a smaller proportion of revenue was converted into free cash flow after capital spending.
- Compared to the previous quarter, both operating cash flow and free cash flow were substantially lower, while capital expenditure decreased slightly. Versus the same quarter one year prior, operating cash flow, free cash flow, and free cash flow margin were broadly stable, with revenue moderately higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$19.6B
Trailing twelve-month free cash flow.
Quarter free cash flow
$2.8B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$3.0B
Cash generated by operations before capital spending.
CapEx
$247.0M
Capital spending and related asset purchases.
FCF margin
198.8%
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 | $1.4B | $3.4B | $206.0M | $3.1B | 222.3% |
| 2023-09-30 | $1.5B | $7.1B | $259.0M | $6.9B | 465.8% |
| 2023-12-31 | $1.5B | $7.1B | $261.0M | $6.8B | 463.3% |
| 2024-03-31 | $1.4B | $3.0B | $247.0M | $2.8B | 198.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 215.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 17.8% | 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 Drop
The most notable observable driver is the substantial decline in operating cash flow from the prior quarter, which directly reduced free cash flow despite a smaller reduction in capital expenditure.
Weaker cash generation from operations compressed free cash flow and margin relative to the preceding quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow exceeded capital expenditure by a wide margin, producing positive free cash flow. However, the free cash flow margin was lower than the prior quarter and the year-ago quarter, indicating that a smaller proportion of revenue was converted into free cash flow after capital spending.
Compared to the previous quarter, both operating cash flow and free cash flow were substantially lower, while capital expenditure decreased slightly. Versus the same quarter one year prior, operating cash flow, free cash flow, and free cash flow margin were broadly stable, with revenue moderately higher.
Monitor whether operating cash flow can recover toward the level of the prior quarter amid stable revenue.