Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue increased from the prior quarter and the year-ago quarter, but free cash flow and free cash flow margin declined significantly compared to both periods. Operating cash flow was lower than both the preceding quarter and the same quarter last year, while capital expenditure rose.
- Cash conversion weakened as operating cash flow as a proportion of revenue decreased, and free cash flow margin contracted from the prior quarter and the year-ago quarter. Capital expenditure increased, further reducing free cash flow relative to operating cash flow.
- Compared to the immediately preceding quarter, revenue improved but operating cash flow, free cash flow, and free cash flow margin all declined. Versus the same quarter one year earlier, revenue was higher while operating cash flow, free cash flow, and free cash flow margin were lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$17.8B
Trailing twelve-month free cash flow.
Quarter free cash flow
$2.0B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$2.3B
Cash generated by operations before capital spending.
CapEx
$241.0M
Capital spending and related asset purchases.
FCF margin
14.0%
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 |
|---|---|---|---|---|---|
| 2023-09-30 | $13.9B | $7.6B | $219.0M | $7.4B | 52.8% |
| 2023-12-31 | $14.3B | $4.8B | $205.0M | $4.5B | 31.8% |
| 2024-03-31 | $12.3B | $4.0B | $193.0M | $3.8B | 31.3% |
| 2024-06-30 | $14.5B | $2.3B | $241.0M | $2.0B | 14.0% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 148.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.7% | Lower capital intensity usually supports FCF margin. |
| Net cash | n/a | 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 Decline
Operating cash flow was lower than both the prior quarter and the year-ago quarter, despite higher revenue. The filing context notes that operating cash flows for the six-month period decreased compared to the prior year primarily due to timing of working capital, higher contingent consideration payments, and decreased results from operations driven by acquisition-related cash expenses.
The decline in operating cash flow was the primary factor behind the lower free cash flow and free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Cash conversion weakened as operating cash flow as a proportion of revenue decreased, and free cash flow margin contracted from the prior quarter and the year-ago quarter. Capital expenditure increased, further reducing free cash flow relative to operating cash flow.
Compared to the immediately preceding quarter, revenue improved but operating cash flow, free cash flow, and free cash flow margin all declined. Versus the same quarter one year earlier, revenue was higher while operating cash flow, free cash flow, and free cash flow margin were lower.
Monitor the trajectory of operating cash flow, which decreased from both the prior quarter and the year-ago quarter.