Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Cash conversion weakened sharply this quarter as operating cash flow fell while revenue rose, resulting in a much lower free cash flow margin. The decline was driven entirely by a drop in operating cash flow, as capital expenditure remained stable.
- Revenue increased compared to the prior quarter, but operating cash flow declined substantially, causing free cash flow to fall and the free cash flow margin to narrow. Capital expenditure was little changed, so the conversion weakness stemmed from cash generation from operations.
- Compared to the immediately preceding quarter, free cash flow and its margin both decreased, while revenue was higher. Versus the same quarter one year earlier, revenue was lower but free cash flow and margin also declined, with operating cash flow weaker in both comparisons.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.5B
Trailing twelve-month free cash flow.
Quarter free cash flow
$119.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$149.9M
Cash generated by operations before capital spending.
CapEx
$30.9M
Capital spending and related asset purchases.
FCF margin
2.2%
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 | $5.6B | $468.6M | $43.4M | $425.2M | 7.6% |
| 2023-12-31 | $5.0B | $536.5M | $33.5M | $503.0M | 10.0% |
| 2024-03-31 | $4.9B | $440.0M | $29.5M | $410.5M | 8.4% |
| 2024-06-30 | $5.4B | $149.9M | $30.9M | $119.0M | 2.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 42.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.6% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$5.0B | 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 dropped significantly from both the prior quarter and the year-ago quarter, despite revenue being higher than the prior quarter. This was the strongest observable driver of the lower free cash flow and margin.
The decline in operating cash flow directly reduced free cash flow and compressed the free cash flow margin, making cash conversion the key area of weakness this quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased compared to the prior quarter, but operating cash flow declined substantially, causing free cash flow to fall and the free cash flow margin to narrow. Capital expenditure was little changed, so the conversion weakness stemmed from cash generation from operations.
Compared to the immediately preceding quarter, free cash flow and its margin both decreased, while revenue was higher. Versus the same quarter one year earlier, revenue was lower but free cash flow and margin also declined, with operating cash flow weaker in both comparisons.
Monitor whether operating cash flow recovers toward prior levels, as it was the primary factor behind the weakened cash conversion this quarter.