Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
In Q4 2024, free cash flow turned positive and margin improved compared to both the prior quarter and the same quarter last year, driven by higher operating cash flow relative to capital expenditure. The company's cash conversion strengthened as operating cash flow increased while capital spending remained lower than a year ago.
- Revenue was lower than the previous quarter but higher than a year earlier. Operating cash flow rose sequentially and year-over-year, while capital expenditure increased from the prior quarter but decreased sharply from the same quarter last year. The resulting free cash flow was higher than both comparison periods, and the free cash flow margin improved significantly.
- Compared to the preceding quarter, revenue declined but operating cash flow, free cash flow, and margin all improved. Versus the same quarter one year ago, revenue, operating cash flow, free cash flow, and margin were all higher, while capital expenditure was substantially lower.
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
$915.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.5B
Cash generated by operations before capital spending.
CapEx
$552.0M
Capital spending and related asset purchases.
FCF margin
24.3%
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 |
|---|---|---|---|---|---|
| 2024-03-31 | $3.7B | $1.3B | $242.0M | $1.1B | 29.1% |
| 2024-06-30 | $4.1B | $1.6B | $2.1B | -$567.0M | -13.8% |
| 2024-09-30 | $4.9B | $897.0M | $334.0M | $563.0M | 11.5% |
| 2024-12-31 | $3.8B | $1.5B | $552.0M | $915.0M | 24.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 165.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 14.7% | 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.
Free Cash Flow Margin Improvement
The free cash flow margin rose from the previous quarter and from the same quarter last year, reflecting a stronger conversion of revenue into free cash flow. Operating cash flow grew while capital spending was contained, particularly compared to the year-ago period.
The improved margin indicates a more efficient cash generation process during the quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was lower than the previous quarter but higher than a year earlier. Operating cash flow rose sequentially and year-over-year, while capital expenditure increased from the prior quarter but decreased sharply from the same quarter last year. The resulting free cash flow was higher than both comparison periods, and the free cash flow margin improved significantly.
Compared to the preceding quarter, revenue declined but operating cash flow, free cash flow, and margin all improved. Versus the same quarter one year ago, revenue, operating cash flow, free cash flow, and margin were all higher, while capital expenditure was substantially lower.
Monitor the trajectory of capital expenditure relative to operating cash flow, as it increased sequentially after a significant year-over-year decline.