Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow margin weakened sequentially and year-over-year, driven by lower operating cash flow on modestly declining revenue. Capital expenditure remained relatively stable in absolute terms.
- Revenue decreased slightly from the prior quarter and from a year ago, while operating cash flow declined more proportionally. This led to a lower free cash flow margin, as capital expenditure was roughly level with the prior quarter and lower than the year-ago period.
- Compared to the immediately preceding quarter, free cash flow and margin both declined, primarily due to lower operating cash flow with relatively stable revenue and capital expenditure. Versus the same quarter one year earlier, free cash flow and margin also weakened, as operating cash flow dropped by a larger magnitude than revenue.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$5.1B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.1B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.4B
Cash generated by operations before capital spending.
CapEx
$287.0M
Capital spending and related asset purchases.
FCF margin
19.7%
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 |
|---|---|---|---|---|---|
| 2023-09-29 | $5.6B | $1.7B | $354.0M | $1.3B | 23.4% |
| 2023-12-31 | $6.4B | $1.6B | $434.0M | $1.2B | 18.5% |
| 2024-03-29 | $5.8B | $1.7B | $291.0M | $1.4B | 25.0% |
| 2024-06-28 | $5.7B | $1.4B | $287.0M | $1.1B | 19.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 124.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 5.0% | 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 Decline
Operating cash flow decreased from both the prior quarter and the year-ago quarter, despite only a modest change in revenue. This was the primary factor behind the weakened free cash flow margin.
The lower operating cash flow directly reduced free cash flow and compressed the margin, even with capital expenditure remaining broadly stable.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue decreased slightly from the prior quarter and from a year ago, while operating cash flow declined more proportionally. This led to a lower free cash flow margin, as capital expenditure was roughly level with the prior quarter and lower than the year-ago period.
Compared to the immediately preceding quarter, free cash flow and margin both declined, primarily due to lower operating cash flow with relatively stable revenue and capital expenditure. Versus the same quarter one year earlier, free cash flow and margin also weakened, as operating cash flow dropped by a larger magnitude than revenue.
Monitor the trend in operating cash flow relative to revenue, as the gap between them widened this quarter.