Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue and operating cash flow both improved compared to the prior quarter, but capital expenditure remained elevated, resulting in a negative free cash flow that was less severe than the previous quarter. Compared to the same quarter last year, free cash flow turned from positive to negative as capital expenditure increased substantially.
- Operating cash flow as a proportion of revenue improved relative to the prior quarter, yet capital expenditure exceeded operating cash flow, producing a negative free cash flow margin. The conversion from revenue to free cash flow remained negative, reflecting the gap between cash generation and investment spending.
- Compared to the immediately preceding quarter, revenue and operating cash flow were higher, capital expenditure was higher, and free cash flow improved (less negative). Compared to the same quarter one year earlier, revenue was higher, operating cash flow was higher, capital expenditure was significantly higher, and free cash flow weakened from positive to negative.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$2.5B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$137.8M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.0B
Cash generated by operations before capital spending.
CapEx
$1.2B
Capital spending and related asset purchases.
FCF margin
-4.7%
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 |
|---|---|---|---|---|---|
| 2023-09-30 | $3.6B | $1.4B | $3.3B | -$1.9B | -53.9% |
| 2023-12-31 | $2.7B | $1.1B | $1.1B | -$3.7M | -0.1% |
| 2024-03-31 | $2.8B | $521.1M | $961.2M | -$440.1M | -15.7% |
| 2024-06-30 | $3.0B | $1.0B | $1.2B | -$137.8M | -4.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -266.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 39.4% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$26.5B | 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 Increase
Capital expenditure rose compared to both the prior quarter and the same quarter last year, becoming the largest cash outflow. This increase was the primary factor behind the negative free cash flow in the current quarter.
Higher capital expenditure absorbed the improvement in operating cash flow, keeping free cash flow negative.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a proportion of revenue improved relative to the prior quarter, yet capital expenditure exceeded operating cash flow, producing a negative free cash flow margin. The conversion from revenue to free cash flow remained negative, reflecting the gap between cash generation and investment spending.
Compared to the immediately preceding quarter, revenue and operating cash flow were higher, capital expenditure was higher, and free cash flow improved (less negative). Compared to the same quarter one year earlier, revenue was higher, operating cash flow was higher, capital expenditure was significantly higher, and free cash flow weakened from positive to negative.
Monitor the trajectory of capital expenditure relative to operating cash flow, as the gap between the two has widened compared to the prior year.