Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue held roughly stable versus the prior quarter and increased from a year earlier. Free cash flow turned positive after a negative year-ago result but fell sharply from the preceding quarter due to lower operating cash flow combined with higher capital spending.
- Revenue was virtually unchanged from the prior quarter, yet operating cash flow dropped substantially, leading to a much lower free cash flow. The free cash flow margin weakened to a minimal level, reflecting the gap between operating cash generation and capital expenditure.
- Compared to the immediately preceding quarter, revenue was stable while free cash flow and its margin weakened considerably as operating cash flow fell and capital expenditure rose. Versus the same quarter one year earlier, revenue improved, operating cash flow increased markedly, and free cash flow turned positive from a negative position.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$17.0B
Trailing twelve-month free cash flow.
Quarter free cash flow
$372.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$6.6B
Cash generated by operations before capital spending.
CapEx
$6.2B
Capital spending and related asset purchases.
FCF margin
0.2%
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 |
|---|---|---|---|---|---|
| 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% |
| 2024-10-31 | $168.0B | $6.6B | $6.2B | $372.0M | 0.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 8.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.7% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$26.8B | 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 Contraction
The decline in operating cash flow from the prior quarter was the strongest observable factor, as revenue held almost flat. This drove a substantial reduction in free cash flow and a sharp drop in free cash flow margin.
If operating cash flow does not recover while capital expenditure remains elevated, free cash flow could stay under pressure.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was virtually unchanged from the prior quarter, yet operating cash flow dropped substantially, leading to a much lower free cash flow. The free cash flow margin weakened to a minimal level, reflecting the gap between operating cash generation and capital expenditure.
Compared to the immediately preceding quarter, revenue was stable while free cash flow and its margin weakened considerably as operating cash flow fell and capital expenditure rose. Versus the same quarter one year earlier, revenue improved, operating cash flow increased markedly, and free cash flow turned positive from a negative position.
Monitor the magnitude of operating cash flow relative to capital expenditure, as the current quarter’s free cash flow was narrow despite higher revenue.