Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
International Business Machines Corporation closed the quarter with higher free cash flow and an improved margin compared to the immediately preceding period, though both metrics were lower than the same period a year earlier. Operating cash flow followed a similar pattern of sequential growth and annual decline.
- Revenue was higher than the prior quarter, supporting a stronger operating cash flow conversion. With capital expenditure remaining relatively stable, free cash flow and free cash flow margin both improved sequentially but weakened compared to the same quarter last year.
- Compared to the immediately preceding quarter, revenue, operating cash flow, and free cash flow were all higher, with the margin strengthening. Versus the same quarter one year earlier, revenue was slightly higher, but operating cash flow, free cash flow, and margin were all lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$12.4B
Trailing twelve-month free cash flow.
Quarter free cash flow
$4.0B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$4.3B
Cash generated by operations before capital spending.
CapEx
$303.0M
Capital spending and related asset purchases.
FCF margin
22.9%
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 |
|---|---|---|---|---|---|
| 2024-03-31 | $14.5B | $4.2B | $239.0M | $3.9B | 27.2% |
| 2024-06-30 | $15.8B | $2.1B | $220.0M | $1.8B | 11.7% |
| 2024-09-30 | $15.0B | $2.9B | $286.0M | $2.6B | 17.3% |
| 2024-12-31 | $17.6B | $4.3B | $303.0M | $4.0B | 22.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 138.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.7% | 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.
Sequential Operating Cash Flow Growth
Operating cash flow benefited from sequentially higher revenue, leading to a notable improvement in free cash flow compared to the prior quarter. This was the strongest observable factor in the quarter's cash generation.
The stronger operating cash flow directly lifted free cash flow and margin on a sequential basis, partially offsetting the year-over-year weakness.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher than the prior quarter, supporting a stronger operating cash flow conversion. With capital expenditure remaining relatively stable, free cash flow and free cash flow margin both improved sequentially but weakened compared to the same quarter last year.
Compared to the immediately preceding quarter, revenue, operating cash flow, and free cash flow were all higher, with the margin strengthening. Versus the same quarter one year earlier, revenue was slightly higher, but operating cash flow, free cash flow, and margin were all lower.
Monitor the trend of free cash flow margin relative to the prior year, as it declined despite a slight revenue increase.