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 sequentially and versus the prior year, as operating cash flow declined while capital expenditure rose. Revenue was stable, but the conversion into free cash flow was lower in both comparisons.
- Operating cash flow as a proportion of revenue was lower than the prior quarter and the year-ago quarter, while capital expenditure consumed a larger share of operating cash flow, resulting in a free cash flow margin that contracted in both comparisons.
- Compared to the immediately preceding quarter, free cash flow and margin were lower, driven by a decline in operating cash flow and a modest increase in capital expenditure. Versus the same quarter one year earlier, free cash flow and margin were also lower, as operating cash flow decreased and capital expenditure rose more significantly.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$4.8B
Trailing twelve-month free cash flow.
Quarter free cash flow
$796.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.9B
Cash generated by operations before capital spending.
CapEx
$1.1B
Capital spending and related asset purchases.
FCF margin
9.6%
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 |
|---|---|---|---|---|---|
| 2023-09-30 | $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% |
| 2024-06-30 | $8.3B | $1.9B | $1.1B | $796.0M | 9.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 47.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 13.7% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$13.6B | 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 was lower than both the prior quarter and the year-ago quarter, while revenue remained relatively stable. This was the strongest observable driver of the weakened free cash flow, as it directly reduced the cash available after capital expenditure.
The lower operating cash flow, combined with higher capital expenditure, compressed free cash flow and margin in both sequential and year-over-year comparisons.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a proportion of revenue was lower than the prior quarter and the year-ago quarter, while capital expenditure consumed a larger share of operating cash flow, resulting in a free cash flow margin that contracted in both comparisons.
Compared to the immediately preceding quarter, free cash flow and margin were lower, driven by a decline in operating cash flow and a modest increase in capital expenditure. Versus the same quarter one year earlier, free cash flow and margin were also lower, as operating cash flow decreased and capital expenditure rose more significantly.
Monitor the trajectory of capital expenditure relative to operating cash flow, as its higher level in the current quarter contributed to the weakened free cash flow conversion.