Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue and operating cash flow both increased compared to the prior quarter and the same quarter last year. However, free cash flow turned sharply negative as capital expenditure rose significantly, resulting in a negative free cash flow margin.
- Operating cash flow as a percentage of revenue weakened markedly compared to the immediately preceding quarter but improved relative to the same quarter one year earlier. Higher capital expenditure outweighed operating cash flow, converting it into negative free cash flow.
- Revenue was higher than both the prior quarter and the year-ago quarter. Operating cash flow decreased from the prior quarter but increased from the year-ago quarter. Capital expenditure was higher than both comparison quarters. Free cash flow turned from positive in the prior quarter to negative, and remained negative compared to the year-ago quarter.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$9.5B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$2.7B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.3B
Cash generated by operations before capital spending.
CapEx
$4.0B
Capital spending and related asset purchases.
FCF margin
-19.0%
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 |
|---|---|---|---|---|---|
| 2024-02-29 | $13.3B | $5.5B | $1.7B | $3.8B | 28.6% |
| 2024-05-31 | $14.3B | $6.1B | $2.8B | $3.3B | 23.0% |
| 2024-08-31 | $13.3B | $7.4B | $2.3B | $5.1B | 38.5% |
| 2024-11-30 | $14.1B | $1.3B | $4.0B | -$2.7B | -19.0% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -84.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 28.2% | 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 Surge
Capital expenditure was substantially higher compared to both the prior quarter and the same quarter last year. This was the strongest observable driver of the negative free cash flow.
The large capital spending more than consumed operating cash flow, turning free cash flow deeply negative.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a percentage of revenue weakened markedly compared to the immediately preceding quarter but improved relative to the same quarter one year earlier. Higher capital expenditure outweighed operating cash flow, converting it into negative free cash flow.
Revenue was higher than both the prior quarter and the year-ago quarter. Operating cash flow decreased from the prior quarter but increased from the year-ago quarter. Capital expenditure was higher than both comparison quarters. Free cash flow turned from positive in the prior quarter to negative, and remained negative compared to the year-ago quarter.
Monitor whether capital expenditure continues at an elevated level in subsequent quarters.