CapEx (Capital Expenditure)
Money spent on long-lived facilities like factories, machines, and buildings — investment spending for the future.
In plain terms
Just as a cafe spends to buy a new coffee machine or expand its store, CapEx is money a company spends on facilities meant to last for years — factories, machines, buildings, servers.
Rather than a cost used up and gone that year, it is closer to "investment for the future" that will generate sales over the coming years.
What it tells you
It shows how much the company is spending on future growth or expanding capacity.
CapEx is subtracted from the cash the core business earned when computing free cash flow (FCF), so to understand why FCF is at its level you have to look at it (operating cash − CapEx = FCF).
Formula
CapEx = cash spent to acquire tangible assets (factories, equipment, etc.) (an investing-activities line on the cash flow statement)
What high or low means
Large CapEx can mean a phase of aggressive investment to grow the business; small CapEx, mostly maintaining existing facilities.
Scale varies greatly by industry (enormous for semiconductors, telecom, airlines; small for software). So compare within the same industry.
Large CapEx is not bad in itself — it can be a seed for future sales. Just know that in a heavy-CapEx year, near-term free cash flow (FCF) shrinks.
Money to "maintain" facilities and money to "grow" them are different in nature. It helps to tell whether large CapEx is for growth or just replacing aging equipment.
Metrics to read alongside
See it in real stocks
Search US stocks on Stocklore to see CapEx and other financial metrics alongside the sector average.
This explanation is for information and reference only and is not a recommendation to buy or sell any security. Investment decisions and their consequences are your own.