Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow and margin weakened significantly this quarter, primarily due to a sharp increase in capital expenditure and lower operating cash flow. Revenue was lower than the prior quarter but higher than the same quarter last year.
- Revenue declined from the prior quarter, while operating cash flow also decreased. Capital expenditure rose sharply, leading to a lower free cash flow and a weakened free cash flow margin compared to both the prior quarter and the year-ago quarter.
- Compared to the prior quarter, all key cash flow metrics were lower, with a particularly large increase in capital expenditure. Relative to the same quarter last year, operating cash flow and free cash flow were lower, while capital expenditure was higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.6B
Trailing twelve-month free cash flow.
Quarter free cash flow
$170.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$428.0M
Cash generated by operations before capital spending.
CapEx
$258.0M
Capital spending and related asset purchases.
FCF margin
4.0%
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 | $4.2B | $661.0M | $119.0M | $542.0M | 12.8% |
| 2024-06-30 | $4.3B | $411.0M | $76.0M | $335.0M | 7.8% |
| 2024-09-30 | $4.4B | $611.0M | $88.0M | $523.0M | 11.9% |
| 2024-12-31 | $4.2B | $428.0M | $258.0M | $170.0M | 4.0% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 35.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 6.1% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$1.7B | 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 Increase
Capital expenditure was substantially higher than both the prior quarter and the year-ago quarter, which was the strongest observable driver of the decline in free cash flow and margin.
The elevated capital spending level bears monitoring in upcoming quarters to assess its effect on cash generation.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue declined from the prior quarter, while operating cash flow also decreased. Capital expenditure rose sharply, leading to a lower free cash flow and a weakened free cash flow margin compared to both the prior quarter and the year-ago quarter.
Compared to the prior quarter, all key cash flow metrics were lower, with a particularly large increase in capital expenditure. Relative to the same quarter last year, operating cash flow and free cash flow were lower, while capital expenditure was higher.
Monitor the level of capital expenditure in future quarters, as it was the primary factor behind the decline in free cash flow.