Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Cash conversion weakened sharply in the current quarter, as free cash flow margin fell to a very low level compared to both the preceding quarter and the same quarter last year. Revenue was lower than the prior quarter but higher than a year ago, while operating cash flow and free cash flow declined substantially.
- Revenue was lower sequentially but higher year-over-year. Operating cash flow decreased significantly from both periods, and capital expenditure increased relative to both comparisons. The resulting free cash flow and free cash flow margin were much lower than both prior periods.
- Compared to the immediately preceding quarter, revenue was lower and operating cash flow, free cash flow, and margin were all much lower. Compared to the same quarter one year earlier, revenue was higher but operating cash flow, free cash flow, and margin were lower.
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
$37.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$204.0M
Cash generated by operations before capital spending.
CapEx
$167.0M
Capital spending and related asset purchases.
FCF margin
0.7%
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 | $5.0B | $688.0M | $152.0M | $536.0M | 10.7% |
| 2023-09-30 | $4.9B | $1.1B | $148.0M | $902.0M | 18.4% |
| 2023-12-31 | $5.8B | $1.5B | $145.0M | $1.4B | 23.8% |
| 2024-03-31 | $5.2B | $204.0M | $167.0M | $37.0M | 0.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 4.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.2% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$10.5B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Sharp decline in operating cash flow
Operating cash flow decreased substantially compared to both the prior quarter and the year-ago quarter, while revenue showed a more moderate change. This decline was the primary observable factor behind the weakened free cash flow.
The free cash flow margin fell to a low level, indicating a much weaker cash conversion from revenue.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was lower sequentially but higher year-over-year. Operating cash flow decreased significantly from both periods, and capital expenditure increased relative to both comparisons. The resulting free cash flow and free cash flow margin were much lower than both prior periods.
Compared to the immediately preceding quarter, revenue was lower and operating cash flow, free cash flow, and margin were all much lower. Compared to the same quarter one year earlier, revenue was higher but operating cash flow, free cash flow, and margin were lower.
Monitor the trajectory of operating cash flow, as its sharp decline drove the significant drop in free cash flow margin.