Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Cash conversion weakened sharply from the prior quarter as operating cash flow fell while capital expenditure rose, resulting in a much lower free cash flow margin. Compared to the same quarter last year, free cash flow was lower even though revenue was higher, reflecting a higher proportion of capital spending relative to operating cash generation.
- Revenue was higher than both the prior quarter and the same quarter last year. However, operating cash flow was lower than the prior quarter, and while it was higher than the year-ago quarter, capital expenditure increased at a faster rate, compressing free cash flow and reducing the free cash flow margin compared to both periods.
- Compared to the prior quarter, operating cash flow was lower and capital expenditure was higher, causing free cash flow and its margin to be substantially lower. Versus the same quarter last year, revenue and operating cash flow were higher, but capital expenditure increased more, resulting in a lower free cash flow and a weakened margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$70.0B
Trailing twelve-month free cash flow.
Quarter free cash flow
$6.5B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$22.3B
Cash generated by operations before capital spending.
CapEx
$15.8B
Capital spending and related asset purchases.
FCF margin
9.3%
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 | $61.9B | $31.9B | $11.0B | $21.0B | 33.9% |
| 2024-06-30 | $64.7B | $37.2B | $13.9B | $23.3B | 36.0% |
| 2024-09-30 | $65.6B | $34.2B | $14.9B | $19.3B | 29.4% |
| 2024-12-31 | $69.6B | $22.3B | $15.8B | $6.5B | 9.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 26.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 22.7% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$27.5B | 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 Increase
Capital expenditure was higher both sequentially and year-over-year. This increase more than offset the improvement in operating cash flow compared to the year-ago quarter and amplified the decline from the prior quarter.
The higher capital expenditure directly reduced free cash flow and compressed the free cash flow margin, making it the strongest observable driver of the quarter's cash conversion outcomes.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher than both the prior quarter and the same quarter last year. However, operating cash flow was lower than the prior quarter, and while it was higher than the year-ago quarter, capital expenditure increased at a faster rate, compressing free cash flow and reducing the free cash flow margin compared to both periods.
Compared to the prior quarter, operating cash flow was lower and capital expenditure was higher, causing free cash flow and its margin to be substantially lower. Versus the same quarter last year, revenue and operating cash flow were higher, but capital expenditure increased more, resulting in a lower free cash flow and a weakened margin.
Monitor the trend of capital expenditure relative to operating cash flow, as its elevated level is the primary observable factor behind the reduced free cash flow conversion.