Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
In the first quarter of fiscal 2024, the company generated free cash flow above one billion dollars, with a margin above thirteen percent. Operating cash flow improved significantly compared to both the prior quarter and the same quarter last year, while capital expenditure increased.
- Revenue was lower than the preceding quarter but higher than a year ago. Operating cash flow conversion strengthened, as the free cash flow margin expanded from the prior quarter and from the same quarter last year.
- Compared to the immediately preceding quarter, free cash flow was higher, driven by a larger increase in operating cash flow that more than offset higher capital spending. Year-over-year, free cash flow was higher, with operating cash flow increasing substantially and capital expenditure rising.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$4.1B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.1B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.5B
Cash generated by operations before capital spending.
CapEx
$324.7M
Capital spending and related asset purchases.
FCF margin
13.1%
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 | $8.9B | $975.5M | $168.4M | $807.1M | 9.1% |
| 2023-09-30 | $8.7B | $1.3B | $190.1M | $1.2B | 13.3% |
| 2023-12-31 | $9.1B | $1.2B | $197.8M | $988.9M | 10.9% |
| 2024-03-31 | $8.7B | $1.5B | $324.7M | $1.1B | 13.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 95.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.7% | 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 Improvement
Operating cash flow was higher compared to both the prior quarter and the same quarter last year, while capital expenditure also increased. This improvement in operating cash flow was the primary observable factor behind the rise in free cash flow.
The stronger operating cash flow led to a higher free cash flow and an expanded free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was lower than the preceding quarter but higher than a year ago. Operating cash flow conversion strengthened, as the free cash flow margin expanded from the prior quarter and from the same quarter last year.
Compared to the immediately preceding quarter, free cash flow was higher, driven by a larger increase in operating cash flow that more than offset higher capital spending. Year-over-year, free cash flow was higher, with operating cash flow increasing substantially and capital expenditure rising.
The increase in capital expenditure and the net cash used in financing activities, as noted in the filing context, are items to monitor.