Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned more negative this quarter as operating cash flow declined and capital expenditure increased relative to the prior quarter. Compared to the same quarter last year, revenue was slightly higher while operating cash flow and capital expenditure were similar, but free cash flow was slightly more negative.
- Revenue conversion to operating cash flow weakened compared to the prior quarter, while capital expenditure rose, resulting in a more negative free cash flow margin. The margin was also slightly more negative than the same quarter a year ago.
- Compared to the immediately preceding quarter, operating cash flow was lower and capital expenditure was higher, causing free cash flow to become significantly more negative. Versus the same quarter one year earlier, revenue was slightly higher but operating cash flow and capital expenditure were stable, resulting in a slightly more negative free cash flow.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$1.5B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$510.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.4B
Cash generated by operations before capital spending.
CapEx
$1.9B
Capital spending and related asset purchases.
FCF margin
-9.3%
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 | $6.0B | $992.0M | $1.8B | -$775.0M | -12.8% |
| 2024-06-30 | $5.4B | $1.5B | $1.7B | -$237.0M | -4.4% |
| 2024-09-30 | $6.2B | $1.7B | $1.7B | -$6.0M | -0.1% |
| 2024-12-31 | $5.5B | $1.4B | $1.9B | -$510.0M | -9.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -78.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 35.4% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$44.3B | 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 outpacing operating cash flow
Capital expenditure remained elevated relative to operating cash flow, which declined from the prior quarter. This combination was the key observable factor behind the more negative free cash flow.
If this pattern persists, free cash flow may continue to be under pressure in future periods.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue conversion to operating cash flow weakened compared to the prior quarter, while capital expenditure rose, resulting in a more negative free cash flow margin. The margin was also slightly more negative than the same quarter a year ago.
Compared to the immediately preceding quarter, operating cash flow was lower and capital expenditure was higher, causing free cash flow to become significantly more negative. Versus the same quarter one year earlier, revenue was slightly higher but operating cash flow and capital expenditure were stable, resulting in a slightly more negative free cash flow.
Monitor the gap between operating cash flow and capital expenditure, as it widened sharply this quarter and was the primary driver of the free cash flow shortfall.