Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow declined from both the prior quarter and the same quarter last year, as higher capital expenditures offset growing revenue and operating cash flow. The free cash flow margin narrowed sequentially and year-over-year, reflecting a shift in the balance between cash generation and investment spending.
- Revenue increased from the prior quarter and the year-ago period, while operating cash flow was lower than both comparative periods, indicating a weaker conversion of revenue into operating cash. Capital expenditure rose significantly versus both the prior quarter and last year, leading to free cash flow that was lower than both prior periods and a free cash flow margin that contracted.
- Compared to the prior quarter, free cash flow and free cash flow margin were both lower, driven by a decrease in operating cash flow and an increase in capital expenditure. Versus the same quarter last year, free cash flow and free cash flow margin also declined, with capital expenditure higher and operating cash flow lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$60.8B
Trailing twelve-month free cash flow.
Quarter free cash flow
$13.5B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$26.6B
Cash generated by operations before capital spending.
CapEx
$13.2B
Capital spending and related asset purchases.
FCF margin
15.9%
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 |
|---|---|---|---|---|---|
| 2023-09-30 | $76.7B | $30.7B | $8.1B | $22.6B | 29.5% |
| 2023-12-31 | $86.3B | $18.9B | $11.0B | $7.9B | 9.1% |
| 2024-03-31 | $80.5B | $28.8B | $12.0B | $16.8B | 20.9% |
| 2024-06-30 | $84.7B | $26.6B | $13.2B | $13.5B | 15.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 57.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 15.6% | 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 Growth
Capital expenditure increased materially from the prior quarter and year-ago period, while operating cash flow decreased compared to both periods. This divergence is the strongest observable factor behind the decline in free cash flow.
Higher capital expenditure absorbed a larger share of operating cash flow, reducing free cash flow and compressing the free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased from the prior quarter and the year-ago period, while operating cash flow was lower than both comparative periods, indicating a weaker conversion of revenue into operating cash. Capital expenditure rose significantly versus both the prior quarter and last year, leading to free cash flow that was lower than both prior periods and a free cash flow margin that contracted.
Compared to the prior quarter, free cash flow and free cash flow margin were both lower, driven by a decrease in operating cash flow and an increase in capital expenditure. Versus the same quarter last year, free cash flow and free cash flow margin also declined, with capital expenditure higher and operating cash flow lower.
Monitor the trajectory of capital expenditure relative to operating cash flow, given the substantial increase in spending and the decline in cash conversion.