Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
This quarter's free cash flow turned positive after a negative result in the same quarter one year earlier, though it declined sharply from the immediately preceding quarter. The cash conversion rate, measured by free cash flow margin, improved from negative to positive year over year but weakened significantly sequentially.
- Revenue was lower than the prior quarter and the year-ago quarter. Operating cash flow and free cash flow were positive, a reversal from the year-ago period, but capital expenditure decreased. The resulting free cash flow margin was positive, contrasting with the negative margin a year earlier, but much lower than the prior quarter.
- Compared to the immediately preceding quarter, revenue decreased, operating cash flow and free cash flow were significantly lower, and capital expenditure was also lower. Relative to the same quarter one year earlier, revenue was lower, but operating cash flow and free cash flow improved from negative to positive, while capital expenditure decreased.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$7.5B
Trailing twelve-month free cash flow.
Quarter free cash flow
$390.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$585.0M
Cash generated by operations before capital spending.
CapEx
$195.0M
Capital spending and related asset purchases.
FCF margin
3.9%
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 |
|---|---|---|---|---|---|
| 2023-06-30 | $10.4B | $2.0B | $292.0M | $1.7B | 16.6% |
| 2023-09-30 | $10.0B | $2.5B | $457.0M | $2.1B | 20.6% |
| 2023-12-31 | $10.3B | $3.6B | $268.0M | $3.3B | 32.2% |
| 2024-03-31 | $10.0B | $585.0M | $195.0M | $390.0M | 3.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -40.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.0% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$39.6B | 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 volatility
Operating cash flow turned positive from a negative position a year ago, but fell substantially from the prior quarter. The company's filing indicates that working capital needs were funded from operations during this quarter.
The lower operating cash flow relative to the prior quarter reduces free cash flow generation.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was lower than the prior quarter and the year-ago quarter. Operating cash flow and free cash flow were positive, a reversal from the year-ago period, but capital expenditure decreased. The resulting free cash flow margin was positive, contrasting with the negative margin a year earlier, but much lower than the prior quarter.
Compared to the immediately preceding quarter, revenue decreased, operating cash flow and free cash flow were significantly lower, and capital expenditure was also lower. Relative to the same quarter one year earlier, revenue was lower, but operating cash flow and free cash flow improved from negative to positive, while capital expenditure decreased.
Monitor the level of operating cash flow, given its large sequential decline from the prior quarter.