Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
This quarter's free cash flow turned negative, primarily due to a substantial drop in operating cash flow even as revenue increased. The cash conversion weakened markedly compared with both the prior quarter and the same period last year.
- Revenue was higher than the prior quarter and the same quarter a year ago, but operating cash flow was significantly lower, leading to negative free cash flow and a negative free cash flow margin.
- Compared with the prior quarter, free cash flow shifted from positive to negative and the margin worsened. Versus the same quarter a year ago, free cash flow also declined from positive to negative, with a weakened margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$6.3B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$300.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$731.0M
Cash generated by operations before capital spending.
CapEx
$1.0B
Capital spending and related asset purchases.
FCF margin
-0.5%
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 |
|---|---|---|---|---|---|
| 2023-02-12 | $55.3B | $3.2B | $890.0M | $2.3B | 4.2% |
| 2023-05-07 | $53.6B | $1.5B | $820.0M | $721.0M | 1.3% |
| 2023-11-26 | $57.8B | $4.7B | $1.0B | $3.6B | 6.2% |
| 2024-02-18 | $58.4B | $731.0M | $1.0B | -$300.0M | -0.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -17.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.8% | Lower capital intensity usually supports FCF margin. |
| Net cash | $2.1B | 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 decreased sharply from both the prior quarter and the same quarter a year ago, even though revenue grew. This drop was the dominant factor that turned free cash flow negative.
If operating cash flow does not recover, future free cash flow may remain under pressure.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher than the prior quarter and the same quarter a year ago, but operating cash flow was significantly lower, leading to negative free cash flow and a negative free cash flow margin.
Compared with the prior quarter, free cash flow shifted from positive to negative and the margin worsened. Versus the same quarter a year ago, free cash flow also declined from positive to negative, with a weakened margin.
Monitor the trajectory of operating cash flow, as its decline was the primary reason free cash flow became negative this quarter.