Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
This quarter, free cash flow margin improved significantly compared to the prior quarter and the same quarter a year ago. Revenue was slightly lower than the prior quarter but higher year over year.
- Cash conversion strengthened as operating cash flow increased substantially compared to both the prior quarter and the same period a year ago. Capital expenditure also increased, but operating cash flow growth outpaced it, leading to a higher free cash flow margin.
- Compared to the prior quarter, free cash flow margin improved due to a larger increase in operating cash flow relative to capital expenditure. Year over year, the margin also improved, driven by stronger operating cash flow generation.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$3.6B
Trailing twelve-month free cash flow.
Quarter free cash flow
$2.7B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$6.3B
Cash generated by operations before capital spending.
CapEx
$3.5B
Capital spending and related asset purchases.
FCF margin
10.9%
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 | $25.2B | $4.4B | $2.3B | $2.1B | 8.2% |
| 2024-03-31 | $21.3B | $242.0M | $2.8B | -$2.5B | -11.9% |
| 2024-06-30 | $25.5B | $3.6B | $2.3B | $1.3B | 5.3% |
| 2024-09-30 | $25.2B | $6.3B | $3.5B | $2.7B | 10.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 126.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 14.0% | Lower capital intensity usually supports FCF margin. |
| Net cash | $12.8B | 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 Improvement
Operating cash flow increased markedly compared to both the prior quarter and the same quarter a year ago, driving the improvement in free cash flow margin.
The higher operating cash flow allowed the company to increase capital expenditure while still generating a higher free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Cash conversion strengthened as operating cash flow increased substantially compared to both the prior quarter and the same period a year ago. Capital expenditure also increased, but operating cash flow growth outpaced it, leading to a higher free cash flow margin.
Compared to the prior quarter, free cash flow margin improved due to a larger increase in operating cash flow relative to capital expenditure. Year over year, the margin also improved, driven by stronger operating cash flow generation.
Monitor the company's ability to adjust capital expenditures in response to changes in manufacturing operations, as noted in the filing.