Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned strongly positive this quarter, with a marked improvement in margin compared to both the prior quarter and the same period last year. Operating cash flow rose substantially while capital expenditure decreased slightly.
- Revenue was higher than in both the preceding quarter and the year-ago quarter. Operating cash flow increased more than proportionally, while capital expenditure was lower, resulting in a higher free cash flow margin.
- Compared to the immediate prior quarter, operating cash flow improved substantially and free cash flow moved from negative to positive. Versus the same quarter one year earlier, both operating cash flow and free cash flow were significantly higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$11.0B
Trailing twelve-month free cash flow.
Quarter free cash flow
$2.2B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$3.1B
Cash generated by operations before capital spending.
CapEx
$861.0M
Capital spending and related asset purchases.
FCF margin
14.1%
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 | $15.0B | $3.7B | $965.0M | $2.7B | 18.2% |
| 2023-09-30 | $16.0B | $7.7B | $902.0M | $6.8B | 42.7% |
| 2023-12-31 | $14.6B | $246.0M | $989.0M | -$743.0M | -5.1% |
| 2024-03-31 | $15.8B | $3.1B | $861.0M | $2.2B | 14.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 46.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 5.5% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$28.6B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Strong operating cash flow
Operating cash flow was the strongest driver of free cash flow improvement. The filing notes that the increase reflected stronger operating performance. Capital expenditure was also lower, further boosting free cash flow.
The combined effect was a sharp rise in free cash flow and a positive margin, in contrast to the negative margin in the prior quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher than in both the preceding quarter and the year-ago quarter. Operating cash flow increased more than proportionally, while capital expenditure was lower, resulting in a higher free cash flow margin.
Compared to the immediate prior quarter, operating cash flow improved substantially and free cash flow moved from negative to positive. Versus the same quarter one year earlier, both operating cash flow and free cash flow were significantly higher.
Monitor the impact of milestone and option payments on future operating cash flow, as mentioned in the filing.