Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue and operating cash flow both improved from the prior quarter, but free cash flow declined due to a larger increase in capital expenditure. Compared with the same quarter last year, revenue and operating cash flow were lower, while free cash flow was slightly higher as capital expenditure decreased more sharply.
- Operating cash flow as a share of revenue was stable compared with the prior quarter and the year-ago quarter. Free cash flow margin weakened from the prior quarter but improved slightly from the year-ago quarter, as capital expenditure consumed a larger portion of operating cash flow than in the prior quarter.
- Compared with the immediately preceding quarter, revenue and operating cash flow were higher, but free cash flow was lower and free cash flow margin weakened. Compared with the same quarter one year earlier, revenue and operating cash flow were lower, while free cash flow was slightly higher and free cash flow margin improved modestly.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.5B
Trailing twelve-month free cash flow.
Quarter free cash flow
$416.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.7B
Cash generated by operations before capital spending.
CapEx
$1.3B
Capital spending and related asset purchases.
FCF margin
10.0%
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 | $4.1B | $1.9B | $1.1B | $776.0M | 19.0% |
| 2024-03-31 | $3.7B | $1.0B | $1.2B | -$231.0M | -6.3% |
| 2024-06-30 | $3.8B | $1.6B | $1.1B | $507.0M | 13.3% |
| 2024-09-30 | $4.2B | $1.7B | $1.3B | $416.0M | 10.0% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 30.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 31.7% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$11.3B | 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 from the prior quarter and, while lower than the year-ago quarter, consumed a larger share of operating cash flow than in the prior quarter, reducing free cash flow.
The higher capital expenditure relative to the prior quarter was the strongest observable driver of the decline in free cash flow.
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 was stable compared with the prior quarter and the year-ago quarter. Free cash flow margin weakened from the prior quarter but improved slightly from the year-ago quarter, as capital expenditure consumed a larger portion of operating cash flow than in the prior quarter.
Compared with the immediately preceding quarter, revenue and operating cash flow were higher, but free cash flow was lower and free cash flow margin weakened. Compared with the same quarter one year earlier, revenue and operating cash flow were lower, while free cash flow was slightly higher and free cash flow margin improved modestly.
Monitor the trajectory of capital expenditure relative to operating cash flow, as its increase from the prior quarter was the primary factor behind the decline in free cash flow.