Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue and operating cash flow improved sequentially, but free cash flow margin weakened compared to the same quarter last year. Higher capital expenditure partially offset the cash flow gains.
- Operating cash flow increased from the prior quarter, supporting a slight improvement in free cash flow margin. However, capital expenditure also rose, limiting the conversion of revenue into free cash flow.
- Compared to the preceding quarter, revenue, operating cash flow, and free cash flow all grew, with a marginally higher margin. Relative to the same quarter one year ago, revenue was higher but operating cash flow and free cash flow were lower, resulting in a lower free cash flow margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$3.5B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.1B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.5B
Cash generated by operations before capital spending.
CapEx
$405.0M
Capital spending and related asset purchases.
FCF margin
11.0%
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 | $9.3B | $1.3B | $299.0M | $1.0B | 11.0% |
| 2024-06-30 | $8.3B | $822.0M | $367.0M | $455.0M | 5.5% |
| 2024-09-30 | $9.2B | $1.3B | $316.0M | $989.0M | 10.7% |
| 2024-12-31 | $9.6B | $1.5B | $405.0M | $1.1B | 11.0% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 60.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 4.2% | 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.
Capital Expenditure Growth
Capital expenditure increased from both the prior quarter and the year-ago quarter, outpacing the growth in operating cash flow. This contributed to a lower free cash flow margin year-over-year.
Continued higher capital spending may pressure free cash flow if operating cash flow does not keep pace.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow increased from the prior quarter, supporting a slight improvement in free cash flow margin. However, capital expenditure also rose, limiting the conversion of revenue into free cash flow.
Compared to the preceding quarter, revenue, operating cash flow, and free cash flow all grew, with a marginally higher margin. Relative to the same quarter one year ago, revenue was higher but operating cash flow and free cash flow were lower, resulting in a lower free cash flow margin.
Monitor the trend in capital expenditure, as it increased both sequentially and year-over-year, affecting free cash flow generation.