Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow was negative for the quarter, reflecting a significant capital expenditure outpacing operating cash flow. The free cash flow margin improved compared to the same quarter last year but weakened slightly from the prior quarter.
- Revenue was lower sequentially but higher year over year. Operating cash flow increased both sequentially and year over year, yet capital expenditure remained elevated, resulting in negative free cash flow. The free cash flow margin was negative, improving year over year but declining marginally from the prior quarter.
- Compared to the previous quarter, revenue decreased, operating cash flow increased, capital expenditure increased, and free cash flow worsened with a lower margin. Compared to the same quarter a year ago, revenue increased, operating cash flow increased, capital expenditure was stable, and free cash flow improved with a higher margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$2.3B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$546.5M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$642.1M
Cash generated by operations before capital spending.
CapEx
$1.2B
Capital spending and related asset purchases.
FCF margin
-18.4%
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 | $3.3B | $291.3M | $1.1B | -$858.1M | -25.7% |
| 2024-06-30 | $2.5B | $670.7M | $1.1B | -$400.8M | -15.8% |
| 2024-09-30 | $3.1B | $555.6M | $1.1B | -$515.4M | -16.8% |
| 2024-12-31 | $3.0B | $642.1M | $1.2B | -$546.5M | -18.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -734.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 40.0% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$26.7B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Capital expenditure outpace operating cash flow
Capital expenditure was the strongest observable driver, exceeding operating cash flow and resulting in a negative free cash flow. The sequential increase in capital expenditure offset the improvement in operating cash flow.
The persistent negative free cash flow is primarily attributable to capital expenditure surpassing operating cash flow.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was lower sequentially but higher year over year. Operating cash flow increased both sequentially and year over year, yet capital expenditure remained elevated, resulting in negative free cash flow. The free cash flow margin was negative, improving year over year but declining marginally from the prior quarter.
Compared to the previous quarter, revenue decreased, operating cash flow increased, capital expenditure increased, and free cash flow worsened with a lower margin. Compared to the same quarter a year ago, revenue increased, operating cash flow increased, capital expenditure was stable, and free cash flow improved with a higher margin.
Monitor the level of capital expenditure relative to operating cash flow, as the gap widened sequentially.