Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned positive in the quarter, driven by a substantial increase in operating cash flow relative to the prior quarter and the same quarter last year. Revenue was modestly lower than the prior quarter but higher than a year ago, while capital expenditure remained unchanged from the prior quarter and decreased compared to the year-ago quarter.
- Operating cash flow increased sharply compared to both the prior quarter and the year-ago quarter, while capital expenditure was stable sequentially and lower year-over-year. This combination produced a positive free cash flow margin, a significant improvement from negative margins in the comparison periods.
- Compared to the immediately preceding quarter, revenue was modestly lower but operating cash flow was substantially higher, leading to a swing from negative to positive free cash flow. Versus the same quarter one year earlier, revenue grew and operating cash flow was significantly higher, while capital expenditure declined, resulting in a large improvement in free cash flow.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.9B
Trailing twelve-month free cash flow.
Quarter free cash flow
$584.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.9B
Cash generated by operations before capital spending.
CapEx
$1.3B
Capital spending and related asset purchases.
FCF margin
3.8%
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 |
|---|---|---|---|---|---|
| 2024-03-31 | $13.7B | $2.4B | $1.2B | $1.2B | 8.8% |
| 2024-06-30 | $16.7B | $2.4B | $1.3B | $1.1B | 6.8% |
| 2024-09-30 | $15.7B | $1.3B | $1.3B | -$54.0M | -0.3% |
| 2024-12-31 | $15.6B | $1.9B | $1.3B | $584.0M | 3.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 69.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 8.4% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$12.3B | 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 rose substantially compared to both the prior quarter and the year-ago quarter, reflecting a stronger cash conversion from revenue. This was the primary driver behind the swing to positive free cash flow.
The higher operating cash flow more than offset a stable capital expenditure, resulting in a positive 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 increased sharply compared to both the prior quarter and the year-ago quarter, while capital expenditure was stable sequentially and lower year-over-year. This combination produced a positive free cash flow margin, a significant improvement from negative margins in the comparison periods.
Compared to the immediately preceding quarter, revenue was modestly lower but operating cash flow was substantially higher, leading to a swing from negative to positive free cash flow. Versus the same quarter one year earlier, revenue grew and operating cash flow was significantly higher, while capital expenditure declined, resulting in a large improvement in free cash flow.
Capital expenditure trends, given their current stability, warrant monitoring for their impact on future free cash flow.