Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned negative this quarter, driven by a sharp increase in capital expenditure relative to operating cash flow. Revenue grew sequentially but was flat year-over-year.
- Operating cash flow as a share of revenue weakened from the prior quarter but improved from a year ago. The free cash flow margin was negative as capital expenditure exceeded operating cash flow.
- Compared to the prior quarter, free cash flow swung from positive to negative, with higher capital expenditure more than offsetting higher revenue. Relative to the same quarter last year, free cash flow was more negative despite improved operating cash flow, due to increased capital spending.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$320.6M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$287.9M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$540.9M
Cash generated by operations before capital spending.
CapEx
$828.8M
Capital spending and related asset purchases.
FCF margin
-7.5%
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 |
|---|---|---|---|---|---|
| 2023-12-31 | $4.2B | $957.7M | $720.0M | $237.7M | 5.6% |
| 2024-03-31 | $4.6B | $876.4M | $669.8M | $206.6M | 4.5% |
| 2024-06-30 | $3.6B | $904.5M | $740.3M | $164.2M | 4.6% |
| 2024-09-30 | $3.9B | $540.9M | $828.8M | -$287.9M | -7.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -74.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 21.5% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$14.1B | 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 same quarter last year, significantly influencing free cash flow.
The higher capital expenditure was the primary factor turning free cash flow negative this quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a share of revenue weakened from the prior quarter but improved from a year ago. The free cash flow margin was negative as capital expenditure exceeded operating cash flow.
Compared to the prior quarter, free cash flow swung from positive to negative, with higher capital expenditure more than offsetting higher revenue. Relative to the same quarter last year, free cash flow was more negative despite improved operating cash flow, due to increased capital spending.
Monitor the trajectory of capital expenditure relative to operating cash flow, as the current quarter's elevated spending drove the negative free cash flow.