Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Operating cash flow turned negative, driving free cash flow deeply negative despite a slight revenue decline from the prior quarter. Capital expenditure was lower than both the prior quarter and the year-ago quarter, but not enough to offset the cash outflow from operations.
- Revenue was higher than the year-ago quarter but lower than the prior quarter. Operating cash flow was negative, resulting in a negative free cash flow and a weakened free cash flow margin compared to the prior quarter, though the margin was slightly improved relative to the year-ago quarter.
- Compared to the prior quarter, operating cash flow shifted from positive to negative, and free cash flow turned from positive to negative. Versus the year-ago quarter, operating cash flow was more negative, but free cash flow was slightly less negative due to lower capital expenditure.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$4.8B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$2.4B
Free cash flow in the selected fiscal quarter.
Operating cash flow
-$1.8B
Cash generated by operations before capital spending.
CapEx
$637.0M
Capital spending and related asset purchases.
FCF margin
-18.2%
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 |
|---|---|---|---|---|---|
| 2023-10-01 | $13.5B | $3.5B | $810.0M | $2.6B | 19.6% |
| 2023-12-31 | $14.6B | $5.2B | $1.0B | $4.2B | 28.8% |
| 2024-03-31 | $14.9B | $1.1B | $704.0M | $386.0M | 2.6% |
| 2024-06-30 | $13.3B | -$1.8B | $637.0M | -$2.4B | -18.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -5897.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 4.8% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$68.4B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Negative operating cash flow
Operating cash flow turned negative this quarter, which is the strongest observable driver of the negative free cash flow. The filing notes that operating cash flows are expected to be significantly below typical levels this year and were particularly lower in the first half, partly due to the timing of certain payments and one-time expenses.
The negative operating cash flow directly caused free cash flow to be negative, despite lower capital expenditure.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher than the year-ago quarter but lower than the prior quarter. Operating cash flow was negative, resulting in a negative free cash flow and a weakened free cash flow margin compared to the prior quarter, though the margin was slightly improved relative to the year-ago quarter.
Compared to the prior quarter, operating cash flow shifted from positive to negative, and free cash flow turned from positive to negative. Versus the year-ago quarter, operating cash flow was more negative, but free cash flow was slightly less negative due to lower capital expenditure.
Monitor whether operating cash flow can return to positive levels in the coming quarters, as the current negative cash conversion is a significant deviation from the prior quarter.