Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned negative in the quarter, driven by a swing in operating cash flow from positive to negative. Revenue was higher than both the prior quarter and the same quarter last year, but the free cash flow margin weakened significantly.
- Revenue was higher than the prior quarter and the year-ago quarter, while operating cash flow turned negative, capital expenditure was lower than both comparative periods, and free cash flow became more negative, resulting in a negative free cash flow margin.
- Compared with the immediately preceding quarter, revenue was higher but operating cash flow declined from positive to negative, capital expenditure was lower, and free cash flow was more negative. Compared with the same quarter one year earlier, revenue was higher, operating cash flow swung from strongly positive to negative, capital expenditure was lower, and free cash flow dropped from positive to negative.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.6B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$607.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
-$456.0M
Cash generated by operations before capital spending.
CapEx
$151.0M
Capital spending and related asset purchases.
FCF margin
-1.7%
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 | $34.8B | $2.5B | $215.0M | $2.3B | 6.7% |
| 2023-09-30 | $35.0B | $1.0B | $136.0M | $885.0M | 2.5% |
| 2023-12-31 | $35.3B | $217.0M | $223.0M | -$6.0M | -0.0% |
| 2024-03-31 | $36.3B | -$456.0M | $151.0M | -$607.0M | -1.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -52.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.4% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$415.0M | 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 swing
Operating cash flow shifted from positive in both comparative periods to negative in the current quarter. The filing indicates that net earnings were more than offset by the timing of experience rebate payments, a delay in premium receipts from a state partner, and pharmacy rebate remittance timing.
This swing was the primary cause of the negative free cash flow and the sharp decline in free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher than the prior quarter and the year-ago quarter, while operating cash flow turned negative, capital expenditure was lower than both comparative periods, and free cash flow became more negative, resulting in a negative free cash flow margin.
Compared with the immediately preceding quarter, revenue was higher but operating cash flow declined from positive to negative, capital expenditure was lower, and free cash flow was more negative. Compared with the same quarter one year earlier, revenue was higher, operating cash flow swung from strongly positive to negative, capital expenditure was lower, and free cash flow dropped from positive to negative.
Monitor the timing of premium payments from state partners and pharmacy rebate remittances, as noted in the filing, which affected operating cash flow.