Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow narrowed from the prior quarter but was slightly lower than the same quarter a year earlier, despite revenue growth. The free cash flow margin weakened sequentially and declined year-over-year.
- Revenue increased from both the prior quarter and the year-ago quarter, while operating cash flow fell compared to the prior quarter but declined slightly from the year-ago quarter. Capital expenditure rose against both periods, contributing to free cash flow that was lower sequentially and marginally lower year-over-year. The free cash flow margin moved lower sequentially and year-over-year.
- Compared to the immediately preceding quarter, free cash flow and free cash flow margin both declined, while operating cash flow also decreased and capital expenditure increased. Versus the same quarter one year earlier, free cash flow was slightly lower and the margin weakened, even though revenue was higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$6.9B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.4B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.5B
Cash generated by operations before capital spending.
CapEx
$158.7M
Capital spending and related asset purchases.
FCF margin
13.5%
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 | $9.4B | $2.2B | $75.7M | $2.1B | 22.8% |
| 2024-06-30 | $9.6B | $1.3B | $78.3M | $1.2B | 12.7% |
| 2024-09-30 | $9.8B | $2.3B | $126.9M | $2.2B | 22.3% |
| 2024-12-31 | $10.2B | $1.5B | $158.7M | $1.4B | 13.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 73.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.5% | 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.
Operating cash flow decline
Operating cash flow decreased from the prior quarter, more than offsetting the increase in revenue. This was the strongest observable driver of the sequential drop in free cash flow, as capital expenditure also rose.
The lower operating cash flow weakened free cash flow and margin sequentially.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased from both the prior quarter and the year-ago quarter, while operating cash flow fell compared to the prior quarter but declined slightly from the year-ago quarter. Capital expenditure rose against both periods, contributing to free cash flow that was lower sequentially and marginally lower year-over-year. The free cash flow margin moved lower sequentially and year-over-year.
Compared to the immediately preceding quarter, free cash flow and free cash flow margin both declined, while operating cash flow also decreased and capital expenditure increased. Versus the same quarter one year earlier, free cash flow was slightly lower and the margin weakened, even though revenue was higher.
Monitor the trajectory of operating cash flow relative to revenue growth, given the sequential decline in cash conversion.