Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow margin weakened sequentially and improved versus the same quarter last year. Operating cash flow was lower than the prior quarter but higher year over year, while capital expenditure decreased both sequentially and annually.
- Revenue was slightly lower than the prior quarter and the year-ago quarter. Operating cash flow as a proportion of revenue was lower sequentially but higher year over year, and capital expenditure as a proportion of revenue decreased both sequentially and annually, resulting in a free cash flow margin that weakened from the prior quarter but improved from the same quarter last year.
- Compared to the immediately preceding quarter, free cash flow and free cash flow margin were lower, driven by lower operating cash flow and lower capital expenditure. Compared to the same quarter one year earlier, free cash flow was lower despite higher operating cash flow, as capital expenditure increased.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$5.3B
Trailing twelve-month free cash flow.
Quarter free cash flow
$906.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$2.0B
Cash generated by operations before capital spending.
CapEx
$1.0B
Capital spending and related asset purchases.
FCF margin
11.2%
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 |
|---|---|---|---|---|---|
| 2023-06-30 | $8.2B | $2.1B | $859.0M | $1.3B | 15.7% |
| 2023-09-30 | $8.2B | $2.5B | $948.0M | $1.6B | 19.3% |
| 2023-12-31 | $8.3B | $2.7B | $1.2B | $1.6B | 19.0% |
| 2024-03-31 | $8.1B | $2.0B | $1.0B | $906.0M | 11.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 55.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 12.9% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$11.4B | 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 Decline
Operating cash flow decreased from the prior quarter, while revenue was only slightly lower. This was the strongest observable driver of the sequential weakening in free cash flow.
The lower operating cash flow reduced free cash flow and margin compared to the prior quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was slightly lower than the prior quarter and the year-ago quarter. Operating cash flow as a proportion of revenue was lower sequentially but higher year over year, and capital expenditure as a proportion of revenue decreased both sequentially and annually, resulting in a free cash flow margin that weakened from the prior quarter but improved from the same quarter last year.
Compared to the immediately preceding quarter, free cash flow and free cash flow margin were lower, driven by lower operating cash flow and lower capital expenditure. Compared to the same quarter one year earlier, free cash flow was lower despite higher operating cash flow, as capital expenditure increased.
Monitor the trend in operating cash flow relative to revenue, as it declined sequentially despite stable revenue.