Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow weakened significantly compared to both the preceding quarter and the same period one year earlier, driven by a much lower operating cash flow. Revenue was slightly higher than both prior periods, but the drop in cash conversion compressed the free cash flow margin.
- Operating cash flow was lower than both the prior quarter and the year-ago quarter, while capital expenditure was slightly higher than the preceding quarter but lower than a year earlier. The combination resulted in a much lower free cash flow and a weakened free cash flow margin.
- Compared with the preceding quarter, revenue was higher but operating cash flow was much lower, leading to a sharply lower free cash flow. Versus the same quarter one year earlier, revenue was slightly higher while operating cash flow was lower, and free cash flow was also lower despite lower capital expenditure.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$4.5B
Trailing twelve-month free cash flow.
Quarter free cash flow
$84.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$739.0M
Cash generated by operations before capital spending.
CapEx
$655.0M
Capital spending and related asset purchases.
FCF margin
0.3%
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 |
|---|---|---|---|---|---|
| 2024-02-03 | $31.9B | $3.3B | $854.0M | $2.4B | 7.6% |
| 2024-05-04 | $24.5B | $1.1B | $674.0M | $427.0M | 1.7% |
| 2024-08-03 | $25.5B | $2.2B | $639.0M | $1.6B | 6.3% |
| 2024-11-02 | $25.7B | $739.0M | $655.0M | $84.0M | 0.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 9.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.6% | 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.
Operating Cash Flow Decline
The most observable driver was the sharp drop in operating cash flow compared to both the prior quarter and the year-ago quarter. This occurred even as revenue was slightly higher, indicating a change in the cash conversion pattern during the period.
The lower operating cash flow directly reduced free cash flow and compressed the margin, despite capital expenditure being lower than a year earlier.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow was lower than both the prior quarter and the year-ago quarter, while capital expenditure was slightly higher than the preceding quarter but lower than a year earlier. The combination resulted in a much lower free cash flow and a weakened free cash flow margin.
Compared with the preceding quarter, revenue was higher but operating cash flow was much lower, leading to a sharply lower free cash flow. Versus the same quarter one year earlier, revenue was slightly higher while operating cash flow was lower, and free cash flow was also lower despite lower capital expenditure.
Monitor the relationship between operating cash flow and capital expenditure, as the current quarter's free cash flow turned significantly lower despite a moderate level of investment.