Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was slightly higher than the prior quarter but lower than the same quarter last year. Operating cash flow matched the prior quarter and improved significantly year-over-year, while free cash flow margin weakened relative to the prior quarter but strengthened compared to a year ago.
- Operating cash flow remained stable sequentially, while capital expenditure increased, leading to a slightly lower free cash flow than the prior quarter. Compared to a year ago, operating cash flow was substantially higher, and despite higher capital expenditure, free cash flow and its margin improved markedly.
- Compared to the prior quarter, free cash flow margin weakened due to higher capital expenditure on modestly higher revenue. Year-over-year, free cash flow margin strengthened as operating cash flow rose more than the increase in capital expenditure and the decline in revenue.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$11.4B
Trailing twelve-month free cash flow.
Quarter free cash flow
$3.4B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$3.7B
Cash generated by operations before capital spending.
CapEx
$217.0M
Capital spending and related asset purchases.
FCF margin
24.9%
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 |
|---|---|---|---|---|---|
| 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% |
| 2024-10-26 | $13.8B | $3.7B | $217.0M | $3.4B | 24.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 127.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.6% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$11.1B | 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 Improvement
Operating cash flow was unchanged from the prior quarter but rose substantially compared to the same quarter last year, providing the primary lift to free cash flow. The filing context shows higher cash and cash equivalents and investments relative to the prior fiscal year-end, and a decrease in remaining performance obligations.
The stronger operating cash flow year-over-year was the primary factor behind the improved free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow remained stable sequentially, while capital expenditure increased, leading to a slightly lower free cash flow than the prior quarter. Compared to a year ago, operating cash flow was substantially higher, and despite higher capital expenditure, free cash flow and its margin improved markedly.
Compared to the prior quarter, free cash flow margin weakened due to higher capital expenditure on modestly higher revenue. Year-over-year, free cash flow margin strengthened as operating cash flow rose more than the increase in capital expenditure and the decline in revenue.
Monitor the trajectory of capital expenditure, which increased both sequentially and year-over-year, as it directly affects free cash flow conversion.