Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue and free cash flow both improved compared to the same quarter last year, while free cash flow margin strengthened. Versus the prior quarter, revenue increased but operating cash flow and free cash flow declined, leading to a lower margin.
- Operating cash flow exceeded capital expenditure by a wide margin, resulting in a free cash flow margin that remained above a third of revenue. The conversion from revenue to free cash flow was supported by operating cash flow that was substantially higher than capital spending.
- Compared to the prior quarter, revenue was higher but operating cash flow and free cash flow were lower, causing the free cash flow margin to weaken. Relative to the same quarter one year earlier, revenue, operating cash flow, free cash flow, and margin all improved.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$7.5B
Trailing twelve-month free cash flow.
Quarter free cash flow
$2.4B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$2.5B
Cash generated by operations before capital spending.
CapEx
$146.0M
Capital spending and related asset purchases.
FCF margin
40.6%
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 | $7.3B | $1.4B | $71.0M | $1.3B | 17.7% |
| 2023-12-31 | $4.8B | $1.3B | $94.0M | $1.3B | 26.2% |
| 2024-03-31 | $4.4B | $2.7B | $130.0M | $2.6B | 58.3% |
| 2024-06-30 | $5.9B | $2.5B | $146.0M | $2.4B | 40.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | n/a | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.5% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$518.0M | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Year-over-year free cash flow growth
Free cash flow was higher than the same quarter last year, driven by a larger increase in operating cash flow relative to the rise in capital expenditure. The free cash flow margin also improved year over year.
This strengthened the company's cash generation capacity compared to the prior year period.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow exceeded capital expenditure by a wide margin, resulting in a free cash flow margin that remained above a third of revenue. The conversion from revenue to free cash flow was supported by operating cash flow that was substantially higher than capital spending.
Compared to the prior quarter, revenue was higher but operating cash flow and free cash flow were lower, causing the free cash flow margin to weaken. Relative to the same quarter one year earlier, revenue, operating cash flow, free cash flow, and margin all improved.
Monitor the trend in operating cash flow relative to revenue, as it declined sequentially despite higher revenue.