Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue rose sequentially and year-over-year, while operating cash flow turned strongly positive from a negative prior quarter. Free cash flow margin improved markedly, reaching a level above the prior year's same quarter.
- Operating cash flow increased substantially relative to revenue, and capital expenditure was lower than the year-ago quarter, resulting in a higher free cash flow margin. The filing notes that the company's cash and equivalents increased and that operating cash flow for the fiscal year included payments related to the National Opioid Settlement Agreement.
- Compared to the prior quarter, revenue was higher and operating cash flow improved from negative to positive, driving a significant improvement in free cash flow. Versus the same quarter last year, revenue and operating cash flow were both higher, while capital expenditure was lower, leading to a higher free cash flow margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$3.3B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.9B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$2.1B
Cash generated by operations before capital spending.
CapEx
$193.0M
Capital spending and related asset purchases.
FCF margin
3.2%
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 |
|---|---|---|---|---|---|
| 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% |
| 2024-06-30 | $59.9B | $2.1B | $193.0M | $1.9B | 3.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 803.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.3% | 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 Recovery
Operating cash flow swung from a negative amount in the prior quarter to a positive amount in the current quarter, and was higher than the same quarter last year. This was the primary factor behind the increase in free cash flow.
The improvement in operating cash flow directly lifted free cash flow and margin to positive territory.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow increased substantially relative to revenue, and capital expenditure was lower than the year-ago quarter, resulting in a higher free cash flow margin. The filing notes that the company's cash and equivalents increased and that operating cash flow for the fiscal year included payments related to the National Opioid Settlement Agreement.
Compared to the prior quarter, revenue was higher and operating cash flow improved from negative to positive, driving a significant improvement in free cash flow. Versus the same quarter last year, revenue and operating cash flow were both higher, while capital expenditure was lower, leading to a higher free cash flow margin.
Monitor the sustainability of operating cash flow levels given the prior quarter's negative figure and the year-ago quarter's lower positive figure.