Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned deeply negative in Q1 2024 as operating cash flow swung to an outflow while capital expenditure remained elevated. Revenue declined from the prior quarter and free cash flow margin weakened compared to both the preceding and year-ago quarters.
- Revenue of the current quarter was lower than the prior quarter, and operating cash flow turned from a positive inflow in the preceding quarter to a negative outflow. With capital expenditure remaining at a substantial level, free cash flow was significantly negative and free cash flow margin weakened markedly.
- Compared to the prior quarter, revenue decreased and operating cash flow shifted from positive to negative, leading to a larger free cash outflow and a lower free cash flow margin. Versus the same quarter one year earlier, revenue was higher, operating cash flow improved from negative to a lesser negative, capital expenditure was lower, and free cash flow was less negative with a better margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$12.3B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$7.2B
Free cash flow in the selected fiscal quarter.
Operating cash flow
-$1.2B
Cash generated by operations before capital spending.
CapEx
$6.0B
Capital spending and related asset purchases.
FCF margin
-56.5%
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 |
|---|---|---|---|---|---|
| 2023-07-01 | $12.9B | $2.8B | $5.9B | -$3.1B | -23.8% |
| 2023-09-30 | $14.2B | $5.8B | $5.8B | $71.0M | 0.5% |
| 2023-12-30 | $15.4B | $4.6B | $6.7B | -$2.1B | -13.4% |
| 2024-03-30 | $12.7B | -$1.2B | $6.0B | -$7.2B | -56.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 1887.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 46.9% | 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.
Operating Cash Flow Swing
Operating cash flow moved from a substantial inflow in the preceding quarter to a notable outflow this quarter, a significant change in cash conversion. This shift, combined with ongoing capital expenditure, drove free cash flow deeper negative.
The weaker operating cash flow was the primary observable factor behind the decline in free cash flow and free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue of the current quarter was lower than the prior quarter, and operating cash flow turned from a positive inflow in the preceding quarter to a negative outflow. With capital expenditure remaining at a substantial level, free cash flow was significantly negative and free cash flow margin weakened markedly.
Compared to the prior quarter, revenue decreased and operating cash flow shifted from positive to negative, leading to a larger free cash outflow and a lower free cash flow margin. Versus the same quarter one year earlier, revenue was higher, operating cash flow improved from negative to a lesser negative, capital expenditure was lower, and free cash flow was less negative with a better margin.
Monitor operating cash flow, which shifted from a positive inflow in the prior quarter to a negative outflow in the current quarter.