Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned negative this quarter, driven by a shift from positive operating cash flow to a small negative, while capital expenditure remained stable. The free cash flow margin weakened significantly compared to both the prior quarter and the same quarter a year ago.
- Revenue was lower than the prior quarter but higher than a year ago. Operating cash flow became negative, leading to negative free cash flow and a negative margin, a sharp reversal from the prior positive levels.
- Operating cash flow and free cash flow were lower than the prior quarter and the same quarter a year ago, with the margin moving from positive to negative. Revenue declined from the prior quarter but increased year over year.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.0B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$139.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
-$27.0M
Cash generated by operations before capital spending.
CapEx
$112.0M
Capital spending and related asset purchases.
FCF margin
-0.3%
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 |
|---|---|---|---|---|---|
| 2023-06-30 | $53.4B | $863.0M | $217.0M | $646.0M | 1.2% |
| 2023-09-30 | $54.6B | $528.0M | $92.0M | $436.0M | 0.8% |
| 2023-12-31 | $57.4B | $1.2B | $114.0M | $1.1B | 1.9% |
| 2024-03-31 | $54.9B | -$27.0M | $112.0M | -$139.0M | -0.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -53.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.2% | 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 reversal
Operating cash flow moved from a positive amount in the prior quarter and year-ago period to a small negative this quarter. The company's filing notes that operating cash flow for the nine-month period includes payments related to the National Opioid Settlement Agreement, which likely affected the quarterly figure.
The reversal in operating cash flow caused free cash flow to turn negative, resulting in a negative margin that contrasts with the positive margins of the comparable periods.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was lower than the prior quarter but higher than a year ago. Operating cash flow became negative, leading to negative free cash flow and a negative margin, a sharp reversal from the prior positive levels.
Operating cash flow and free cash flow were lower than the prior quarter and the same quarter a year ago, with the margin moving from positive to negative. Revenue declined from the prior quarter but increased year over year.
Monitor the trajectory of operating cash flow, which turned negative, and the ongoing impact of opioid settlement-related cash outflows as noted in the filing.