Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue increased compared to both the prior quarter and the same quarter last year, but operating cash flow and free cash flow declined significantly. The free cash flow margin narrowed, reflecting weaker cash conversion during the quarter.
- Revenue rose, yet operating cash flow fell sharply relative to both the preceding quarter and the year-ago period, leading to a lower free cash flow. Capital expenditure was moderately lower than the prior quarter but slightly higher than a year earlier, further contributing to the reduced free cash flow margin.
- Compared to the prior quarter, revenue was higher but operating cash flow, free cash flow, and free cash flow margin were all lower. Versus the same quarter a year ago, revenue was higher while all cash flow metrics and the margin were lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$5.3B
Trailing twelve-month free cash flow.
Quarter free cash flow
$2.5B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$3.1B
Cash generated by operations before capital spending.
CapEx
$638.0M
Capital spending and related asset purchases.
FCF margin
2.7%
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 |
|---|---|---|---|---|---|
| 2023-09-30 | $89.8B | $2.7B | $545.0M | $2.2B | 2.4% |
| 2023-12-31 | $93.8B | -$2.6B | $911.0M | -$3.5B | -3.8% |
| 2024-03-31 | $88.4B | $4.9B | $705.0M | $4.2B | 4.7% |
| 2024-06-30 | $91.2B | $3.1B | $638.0M | $2.5B | 2.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 139.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.7% | 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.
Weakened Cash Conversion
Revenue grew, but operating cash flow and free cash flow declined substantially from both the prior quarter and the year-ago period, resulting in a lower free cash flow margin.
If the trend of declining cash conversion persists, it could constrain the company's ability to fund operations and investments internally.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue rose, yet operating cash flow fell sharply relative to both the preceding quarter and the year-ago period, leading to a lower free cash flow. Capital expenditure was moderately lower than the prior quarter but slightly higher than a year earlier, further contributing to the reduced free cash flow margin.
Compared to the prior quarter, revenue was higher but operating cash flow, free cash flow, and free cash flow margin were all lower. Versus the same quarter a year ago, revenue was higher while all cash flow metrics and the margin were lower.
Monitor the trajectory of operating expenses, which the filing indicated increased to support business growth and acquisition-related activities.