Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned negative this quarter as operating cash flow declined sharply while capital expenditure increased. Revenue was stable compared to the prior quarter and higher than a year ago, but the cash conversion weakened significantly.
- Operating cash flow of three hundred eighteen million dollars was lower than both the prior quarter and the same quarter last year, while capital expenditure of three hundred forty-two million dollars was higher than both periods. This resulted in negative free cash flow and a negative free cash flow margin, a sharp reversal from positive margins in the comparison quarters.
- Compared to the immediately preceding quarter, revenue was slightly higher but operating cash flow was substantially lower, capital expenditure was higher, and free cash flow turned from positive to negative. Versus the same quarter one year earlier, revenue was higher, operating cash flow was lower, capital expenditure was higher, and free cash flow shifted from positive to negative.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.0B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$24.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$318.0M
Cash generated by operations before capital spending.
CapEx
$342.0M
Capital spending and related asset purchases.
FCF margin
-0.4%
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 | $6.0B | $779.0M | $109.0M | $670.0M | 11.2% |
| 2024-06-30 | $6.4B | $772.0M | $125.0M | $647.0M | 10.0% |
| 2024-09-30 | $6.3B | $880.0M | $174.0M | $706.0M | 11.3% |
| 2024-12-31 | $6.4B | $318.0M | $342.0M | -$24.0M | -0.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -5.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 5.3% | Lower capital intensity usually supports FCF margin. |
| Net cash | $341.0M | 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 significantly from both the prior quarter and the year-ago quarter, while revenue remained relatively stable. This divergence is the strongest observable driver of the negative free cash flow.
The lower operating cash flow, combined with higher capital expenditure, caused free cash flow to turn negative for the quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow of three hundred eighteen million dollars was lower than both the prior quarter and the same quarter last year, while capital expenditure of three hundred forty-two million dollars was higher than both periods. This resulted in negative free cash flow and a negative free cash flow margin, a sharp reversal from positive margins in the comparison quarters.
Compared to the immediately preceding quarter, revenue was slightly higher but operating cash flow was substantially lower, capital expenditure was higher, and free cash flow turned from positive to negative. Versus the same quarter one year earlier, revenue was higher, operating cash flow was lower, capital expenditure was higher, and free cash flow shifted from positive to negative.
Monitor the level of capital expenditure relative to operating cash flow, as the quarter's capital expenditure exceeded operating cash flow, contributing to the negative free cash flow.