Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned positive from the prior quarter but remained lower than a year ago, as operating cash flow improved relative to the prior period and capital spending decreased sequentially. The free cash flow margin improved from negative to positive, yet stayed below the year-ago level.
- Revenue was relatively stable sequentially and above the year-ago quarter, while operating cash flow decreased from the prior quarter but increased versus last year. Capital expenditure declined from the prior quarter but rose compared to a year earlier, resulting in free cash flow that improved sequentially but weakened year over year.
- Compared to the immediately preceding quarter, free cash flow shifted from negative to positive, supported by lower capital spending and slightly higher operating cash flow. Relative to the same quarter one year earlier, free cash flow and margin were both lower, as capital expenditure increased at a faster pace than operating cash flow growth.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$9.7B
Trailing twelve-month free cash flow.
Quarter free cash flow
$369.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$3.2B
Cash generated by operations before capital spending.
CapEx
$2.8B
Capital spending and related asset purchases.
FCF margin
0.9%
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 |
|---|---|---|---|---|---|
| 2023-06-30 | $41.3B | $7.6B | $2.3B | $5.3B | 12.9% |
| 2023-09-30 | $40.5B | $6.6B | $2.6B | $4.0B | 9.9% |
| 2023-12-31 | $39.3B | $3.7B | $3.7B | -$49.0M | -0.1% |
| 2024-03-31 | $39.2B | $3.2B | $2.8B | $369.0M | 0.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 12.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 7.1% | 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.
Capital Expenditure Level
Capital expenditure decreased compared to the prior quarter but increased relative to the year-ago quarter, directly influencing the direction of free cash flow. This metric was the most observable differentiator in the cash conversion results.
Changes in capital expenditure had a material effect on free cash flow, with lower spending supporting a positive swing sequentially and higher spending weighing on the year-over-year comparison.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was relatively stable sequentially and above the year-ago quarter, while operating cash flow decreased from the prior quarter but increased versus last year. Capital expenditure declined from the prior quarter but rose compared to a year earlier, resulting in free cash flow that improved sequentially but weakened year over year.
Compared to the immediately preceding quarter, free cash flow shifted from negative to positive, supported by lower capital spending and slightly higher operating cash flow. Relative to the same quarter one year earlier, free cash flow and margin were both lower, as capital expenditure increased at a faster pace than operating cash flow growth.
Monitor the trajectory of capital expenditure, as its variation was a key factor in the sequential and year-over-year changes in free cash flow.