Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow was negative this quarter, driven by operating cash flow that was lower than the preceding quarter but higher than the same quarter last year, while capital expenditure increased significantly. The free cash flow margin weakened compared to both the prior quarter and the year-ago quarter.
- Revenue was lower than the prior quarter but higher than a year ago. Operating cash flow as a proportion of revenue declined sequentially, and after deducting higher capital expenditure, free cash flow turned deeply negative, resulting in a negative margin.
- Compared to the preceding quarter, revenue, operating cash flow, and free cash flow all decreased, while capital expenditure increased. Versus the same quarter one year earlier, revenue and operating cash flow improved, but capital expenditure rose more sharply, causing free cash flow to worsen from a smaller negative to a larger negative.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$2.9B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$1.7B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$2.6B
Cash generated by operations before capital spending.
CapEx
$4.3B
Capital spending and related asset purchases.
FCF margin
-24.2%
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 |
|---|---|---|---|---|---|
| 2025-03-31 | $7.8B | $1.3B | $2.4B | -$1.2B | -15.3% |
| 2025-06-30 | $7.0B | $2.2B | $2.8B | -$619.0M | -8.9% |
| 2025-09-30 | $7.8B | $3.8B | $3.2B | $559.0M | 7.1% |
| 2025-12-31 | $7.0B | $2.6B | $4.3B | -$1.7B | -24.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -405.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 61.4% | 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 Increase
Capital expenditure rose compared to both the prior quarter and the year-ago quarter, outpacing the growth in operating cash flow. This was the strongest observable factor behind the negative free cash flow.
Higher capital expenditure directly reduced free cash flow and widened the negative margin.
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 higher than a year ago. Operating cash flow as a proportion of revenue declined sequentially, and after deducting higher capital expenditure, free cash flow turned deeply negative, resulting in a negative margin.
Compared to the preceding quarter, revenue, operating cash flow, and free cash flow all decreased, while capital expenditure increased. Versus the same quarter one year earlier, revenue and operating cash flow improved, but capital expenditure rose more sharply, causing free cash flow to worsen from a smaller negative to a larger negative.
Monitor the trend in capital expenditure relative to operating cash flow, as the gap widened substantially this quarter.