Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was stable versus both the prior quarter and the same quarter last year. Free cash flow was higher sequentially but lower year over year, reflecting changes in operating cash flow and capital expenditure.
- Operating cash flow of over a billion dollars funded capital expenditure of over half a billion, resulting in free cash flow of over half a billion. The free cash flow margin showed improvement from the preceding quarter but weakened versus the same quarter one year earlier.
- Compared to the prior quarter, revenue was comparable while operating cash flow was similar and capital expenditure was higher, leading to a higher free cash flow and an improved margin. Versus the same quarter a year ago, revenue was similar, operating cash flow and free cash flow were lower, capital expenditure was lower, and free cash flow margin weakened.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.9B
Trailing twelve-month free cash flow.
Quarter free cash flow
$558.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.1B
Cash generated by operations before capital spending.
CapEx
$549.0M
Capital spending and related asset purchases.
FCF margin
15.1%
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 | $3.6B | $1.6B | $574.0M | $978.0M | 27.4% |
| 2023-12-31 | $3.7B | $1.5B | $686.0M | $803.0M | 21.8% |
| 2024-03-31 | $3.7B | $1.1B | $517.0M | $549.0M | 14.9% |
| 2024-06-30 | $3.7B | $1.1B | $549.0M | $558.0M | 15.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 57.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 14.8% | 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 Decrease
The filing notes that a payment of postponed federal taxes and lower cash-generating net earnings contributed to a decrease in cash from operating activities for the six-month period, partially offset by the prior year impact of retroactive wage payments.
The lower operating cash flow was the primary observable factor behind the year-over-year decline in free cash flow.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow of over a billion dollars funded capital expenditure of over half a billion, resulting in free cash flow of over half a billion. The free cash flow margin showed improvement from the preceding quarter but weakened versus the same quarter one year earlier.
Compared to the prior quarter, revenue was comparable while operating cash flow was similar and capital expenditure was higher, leading to a higher free cash flow and an improved margin. Versus the same quarter a year ago, revenue was similar, operating cash flow and free cash flow were lower, capital expenditure was lower, and free cash flow margin weakened.
Monitor changes in operating cash flow, which decreased year over year and is the strongest observable driver of the decline in free cash flow.