Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
The quarter's free cash flow turned positive, driven by a substantial increase in operating cash flow relative to the prior quarter, though free cash flow margin remained below the year-ago level. Revenue grew compared to both the prior quarter and the same quarter last year, while capital expenditure rose.
- Revenue increased, and operating cash flow more than recovered from the prior quarter's low, resulting in positive free cash flow. However, the free cash flow margin, while improved sequentially, was lower than the year-ago margin, reflecting higher capital expenditure relative to revenue.
- Compared to the immediately preceding quarter, operating cash flow, free cash flow, and free cash flow margin all improved significantly. Relative to the same quarter one year earlier, operating cash flow and free cash flow were lower, while capital expenditure was higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$12.0B
Trailing twelve-month free cash flow.
Quarter free cash flow
$6.3B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$12.1B
Cash generated by operations before capital spending.
CapEx
$5.8B
Capital spending and related asset purchases.
FCF margin
3.7%
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 |
|---|---|---|---|---|---|
| 2023-10-31 | $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% |
| 2024-07-31 | $167.8B | $12.1B | $5.8B | $6.3B | 3.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 139.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.5% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$28.0B | 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 Recovery
Operating cash flow rebounded sharply from the prior quarter, lifting free cash flow from negative to positive. The filing notes that return on assets and return on investment for the trailing twelve months increased, attributed to higher net income and operating income.
This recovery enabled the company to generate positive free cash flow after a negative prior quarter, though the absolute level remained below the year-ago figure.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased, and operating cash flow more than recovered from the prior quarter's low, resulting in positive free cash flow. However, the free cash flow margin, while improved sequentially, was lower than the year-ago margin, reflecting higher capital expenditure relative to revenue.
Compared to the immediately preceding quarter, operating cash flow, free cash flow, and free cash flow margin all improved significantly. Relative to the same quarter one year earlier, operating cash flow and free cash flow were lower, while capital expenditure was higher.
Monitor the trend in operating cash flow, as it declined from the year-ago period despite higher revenue.