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 was negative, driven by a sharp drop in operating cash flow despite higher revenue. Both the prior quarter and the same quarter a year earlier had positive free cash flow with strong operating cash generation.
- Revenue rose this quarter, but operating cash flow turned negative, resulting in free cash flow that was also negative after capital expenditure. The free cash flow margin decreased from positive in the prior quarter and the year-ago quarter to a negative level.
- Compared to the prior quarter, operating cash flow weakened significantly from a positive level to negative, and free cash flow shifted from positive to negative. Compared to the same quarter a year earlier, operating cash flow also declined from positive to negative, and free cash flow reversed from positive to negative.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.7B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$1.4B
Free cash flow in the selected fiscal quarter.
Operating cash flow
-$745.0M
Cash generated by operations before capital spending.
CapEx
$670.0M
Capital spending and related asset purchases.
FCF margin
-1.5%
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 |
|---|---|---|---|---|---|
| 2023-12-31 | $93.8B | -$2.6B | $911.0M | -$3.5B | -3.8% |
| 2024-03-31 | $88.4B | $4.9B | $705.0M | $4.2B | 4.7% |
| 2024-06-30 | $91.2B | $3.1B | $638.0M | $2.5B | 2.7% |
| 2024-09-30 | $95.4B | -$745.0M | $670.0M | -$1.4B | -1.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -1626.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.7% | 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 Turned Negative
The most observable driver this quarter was the decline in operating cash flow from a positive amount in the prior quarter and the year-ago quarter to a negative figure. This change, combined with a modest increase in capital expenditure, resulted in negative free cash flow.
The negative free cash flow was entirely attributable to the shortfall in operating cash flow, which was insufficient to cover capital expenditure.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue rose this quarter, but operating cash flow turned negative, resulting in free cash flow that was also negative after capital expenditure. The free cash flow margin decreased from positive in the prior quarter and the year-ago quarter to a negative level.
Compared to the prior quarter, operating cash flow weakened significantly from a positive level to negative, and free cash flow shifted from positive to negative. Compared to the same quarter a year earlier, operating cash flow also declined from positive to negative, and free cash flow reversed from positive to negative.
Monitor whether operating cash flow can return to a positive level in the coming quarters, as it is the primary driver of free cash flow.