Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow and margin weakened sharply compared with both the prior quarter and the same quarter last year, driven by a lower operating cash flow while capital expenditure remained elevated. Revenue was lower than the prior quarter but higher than the year-ago period.
- Operating cash flow as a proportion of revenue declined substantially, resulting in a free cash flow margin that was much lower than in the preceding quarter and the same quarter one year earlier. Capital expenditure was lower than the prior quarter but higher than the year-ago period, further compressing free cash flow.
- Compared with the immediately preceding quarter, revenue, operating cash flow, free cash flow, and free cash flow margin all decreased. Versus the same quarter one year earlier, revenue increased, but operating cash flow, free cash flow, and margin all declined.
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
$84.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$596.0M
Cash generated by operations before capital spending.
CapEx
$512.0M
Capital spending and related asset purchases.
FCF margin
1.8%
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 | $3.7B | $772.0M | $305.0M | $467.0M | 12.5% |
| 2023-09-30 | $4.2B | $920.0M | $398.0M | $522.0M | 12.5% |
| 2023-12-31 | $5.2B | $1.5B | $603.0M | $905.0M | 17.3% |
| 2024-03-31 | $4.8B | $596.0M | $512.0M | $84.0M | 1.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 13.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 10.7% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$21.6B | 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 was significantly lower than both the prior quarter and the year-ago quarter, despite revenue being higher than the year-ago level. This decline was the primary factor behind the weakened free cash flow and margin.
The lower operating cash flow reduced the cash available for investment and distribution, even as capital expenditure remained at a similar level to the prior quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a proportion of revenue declined substantially, resulting in a free cash flow margin that was much lower than in the preceding quarter and the same quarter one year earlier. Capital expenditure was lower than the prior quarter but higher than the year-ago period, further compressing free cash flow.
Compared with the immediately preceding quarter, revenue, operating cash flow, free cash flow, and free cash flow margin all decreased. Versus the same quarter one year earlier, revenue increased, but operating cash flow, free cash flow, and margin all declined.
Monitor the relationship between capital expenditure and operating cash flow, as capital spending remained relatively high while operating cash flow contracted.