Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Cash generation weakened in the current quarter as free cash flow and its margin both declined. Revenue increased from the prior quarter but decreased from the same quarter a year earlier, while operating cash flow decreased from both periods.
- The free cash flow margin declined because operating cash flow decreased more than revenue, while capital expenditure was higher than the prior quarter but lower than the year-ago quarter.
- Compared to the prior quarter, free cash flow was lower even though revenue was higher, driven by a decrease in operating cash flow and a slight increase in capital expenditure. Compared to the same quarter a year earlier, both revenue and operating cash flow were lower, resulting in a significantly lower free cash flow margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$10.2B
Trailing twelve-month free cash flow.
Quarter free cash flow
$3.5B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$3.7B
Cash generated by operations before capital spending.
CapEx
$198.0M
Capital spending and related asset purchases.
FCF margin
25.9%
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 |
|---|---|---|---|---|---|
| 2023-10-28 | $14.7B | $2.4B | $134.0M | $2.2B | 15.3% |
| 2024-01-27 | $12.8B | $808.0M | $170.0M | $638.0M | 5.0% |
| 2024-04-27 | $12.7B | $4.0B | $168.0M | $3.8B | 29.9% |
| 2024-07-27 | $13.6B | $3.7B | $198.0M | $3.5B | 25.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 163.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.5% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$12.6B | 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 from both the prior quarter and the year-ago quarter, despite revenue increasing sequentially. This decline was the primary observable factor behind the lower free cash flow and margin.
The lower operating cash flow constrained free cash flow generation, reducing the margin to a level below both comparable periods.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
The free cash flow margin declined because operating cash flow decreased more than revenue, while capital expenditure was higher than the prior quarter but lower than the year-ago quarter.
Compared to the prior quarter, free cash flow was lower even though revenue was higher, driven by a decrease in operating cash flow and a slight increase in capital expenditure. Compared to the same quarter a year earlier, both revenue and operating cash flow were lower, resulting in a significantly lower free cash flow margin.
Monitor the trend of operating cash flow relative to revenue, as the conversion rate weakened this quarter.