Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
The company's free cash flow margin weakened sequentially but improved compared to the year-ago period. Operating cash flow declined significantly from the prior quarter, while capital expenditure also decreased.
- Revenue was stable compared to the prior quarter and higher than a year ago. Operating cash flow was lower than the prior quarter but higher than the year-ago quarter. Capital expenditure decreased both sequentially and year-over-year. Free cash flow and its margin followed the same pattern as operating cash flow.
- Compared to the prior quarter, free cash flow and margin were lower due to a substantial drop in operating cash flow. Versus the year-ago quarter, both free cash flow and margin improved.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$18.7B
Trailing twelve-month free cash flow.
Quarter free cash flow
$2.9B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$3.7B
Cash generated by operations before capital spending.
CapEx
$807.0M
Capital spending and related asset purchases.
FCF margin
13.3%
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 |
|---|---|---|---|---|---|
| 2023-07-02 | $21.5B | $4.2B | $1.1B | $3.1B | 14.2% |
| 2023-10-01 | $21.4B | $7.5B | $967.0M | $6.5B | 30.5% |
| 2023-12-31 | $21.4B | $7.9B | $1.6B | $6.3B | 29.3% |
| 2024-03-31 | $21.4B | $3.7B | $807.0M | $2.9B | 13.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 87.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.8% | 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 variability
Operating cash flow decreased sharply from the prior quarter, despite higher net earnings and non-cash adjustments, partially offset by a deferred tax provision. The year-over-year trend shows improvement, but the sequential volatility is notable.
The lower operating cash flow drove the sequential decline in free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was stable compared to the prior quarter and higher than a year ago. Operating cash flow was lower than the prior quarter but higher than the year-ago quarter. Capital expenditure decreased both sequentially and year-over-year. Free cash flow and its margin followed the same pattern as operating cash flow.
Compared to the prior quarter, free cash flow and margin were lower due to a substantial drop in operating cash flow. Versus the year-ago quarter, both free cash flow and margin improved.
Monitor the impact of the deferred tax provision on operating cash flow, as noted in the filing.