Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Operating cash flow improved sharply from the prior quarter, but capital expenditure remained elevated, resulting in a negative free cash flow that was less severe than both the preceding quarter and the same quarter last year. The free cash flow margin strengthened significantly compared to both prior periods.
- Revenue was lower than the prior quarter but slightly below the year-ago level, while operating cash flow more than recovered from the prior quarter's low and was higher than a year earlier. Capital expenditure was unchanged from the prior quarter and higher than a year ago, so the improvement in free cash flow was driven entirely by stronger operating cash conversion.
- Compared to the prior quarter, free cash flow was less negative and the margin improved, driven by a substantial increase in operating cash flow despite similar revenue and capital expenditure. Versus the same quarter last year, free cash flow also improved, with operating cash flow higher and capital expenditure only moderately higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$4.2B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$377.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$2.3B
Cash generated by operations before capital spending.
CapEx
$2.6B
Capital spending and related asset purchases.
FCF margin
-6.4%
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 | $5.3B | $1.3B | $2.4B | -$1.1B | -21.1% |
| 2023-09-30 | $5.9B | $1.8B | $2.4B | -$611.0M | -10.4% |
| 2023-12-31 | $7.0B | $477.0M | $2.6B | -$2.1B | -30.3% |
| 2024-03-31 | $5.9B | $2.3B | $2.6B | -$377.0M | -6.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -51.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 45.0% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$53.7B | 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 Recovery
Operating cash flow rose sharply from the prior quarter and was higher than a year earlier, marking the strongest observable driver of the improved free cash flow. This recovery occurred even as revenue was lower than the prior quarter.
The higher operating cash flow directly reduced the free cash flow deficit and improved the margin compared to both prior periods.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was lower than the prior quarter but slightly below the year-ago level, while operating cash flow more than recovered from the prior quarter's low and was higher than a year earlier. Capital expenditure was unchanged from the prior quarter and higher than a year ago, so the improvement in free cash flow was driven entirely by stronger operating cash conversion.
Compared to the prior quarter, free cash flow was less negative and the margin improved, driven by a substantial increase in operating cash flow despite similar revenue and capital expenditure. Versus the same quarter last year, free cash flow also improved, with operating cash flow higher and capital expenditure only moderately higher.
Monitor whether capital expenditure remains at the current level in future quarters, as it continues to absorb a large portion of operating cash flow.