Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue increased from the year-ago quarter but declined from the prior quarter. Operating cash flow decreased compared to both periods, leading to a negative free cash flow and margin.
- Operating cash flow was insufficient to cover capital expenditure, resulting in negative free cash flow. The free cash flow margin turned negative, contrasting with positive margins in the two prior quarters.
- Compared to the immediately preceding quarter, operating cash flow declined substantially while capital expenditure also decreased but to a lesser extent, causing free cash flow to swing from positive to negative. From the same quarter one year earlier, revenue and capital expenditure were higher, but operating cash flow was slightly lower, resulting in a weaker free cash flow position. The filing notes that trailing twelve-month return on assets and return on investment increased compared to the prior year, primarily due to higher operating income and changes in fair value of investments.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$14.5B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$427.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$4.2B
Cash generated by operations before capital spending.
CapEx
$4.7B
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 |
|---|---|---|---|---|---|
| 2023-07-31 | $160.3B | $13.6B | $4.8B | $8.8B | 5.5% |
| 2023-10-31 | $159.4B | $813.0M | $5.5B | -$4.6B | -2.9% |
| 2024-01-31 | $171.9B | $16.7B | $5.9B | $10.8B | 6.3% |
| 2024-04-30 | $159.9B | $4.2B | $4.7B | -$427.0M | -0.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -8.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.9% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$28.4B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Declining Operating Cash Flow
Operating cash flow decreased compared to both the prior quarter and the year-ago quarter, while capital expenditure remained at a comparable level to the year-ago period. This imbalance drove free cash flow negative.
If operating cash flow does not recover, free cash flow may remain negative.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow was insufficient to cover capital expenditure, resulting in negative free cash flow. The free cash flow margin turned negative, contrasting with positive margins in the two prior quarters.
Compared to the immediately preceding quarter, operating cash flow declined substantially while capital expenditure also decreased but to a lesser extent, causing free cash flow to swing from positive to negative. From the same quarter one year earlier, revenue and capital expenditure were higher, but operating cash flow was slightly lower, resulting in a weaker free cash flow position. The filing notes that trailing twelve-month return on assets and return on investment increased compared to the prior year, primarily due to higher operating income and changes in fair value of investments.
Monitor the ability of operating cash flow to cover capital expenditure in the coming quarters.