Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Operating cash flow and revenue were stable compared to the previous quarter, while capital expenditure declined, leading to a positive free cash flow margin. Compared to the same quarter last year, operating cash flow was lower but capital expenditure was also significantly lower, resulting in a shift from a negative to a positive free cash flow margin.
- Revenue was unchanged from the prior quarter, while operating cash flow improved modestly and capital expenditure decreased substantially, which together produced a positive free cash flow and margin. The year-ago quarter had a much higher level of capital expenditure that weighed on free cash flow despite higher operating cash flow.
- Compared to the immediately preceding quarter, the free cash flow margin improved from negative to positive, driven primarily by lower capital expenditure. Versus the same quarter one year earlier, the margin also moved from negative to positive, as the decline in capital expenditure more than offset the reduction in operating cash flow.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$442.5M
Trailing twelve-month free cash flow.
Quarter free cash flow
$132.4M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$479.7M
Cash generated by operations before capital spending.
CapEx
$347.3M
Capital spending and related asset purchases.
FCF margin
3.3%
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 | $4.1B | $482.4M | $832.9M | -$350.5M | -8.5% |
| 2023-12-31 | $4.2B | $411.1M | $567.2M | -$156.1M | -3.7% |
| 2024-03-31 | $4.0B | $451.3M | $519.6M | -$68.4M | -1.7% |
| 2024-06-30 | $4.0B | $479.7M | $347.3M | $132.4M | 3.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -63.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 8.8% | 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.
Lower Capital Expenditure
Capital expenditure decreased from both the prior quarter and the year-ago quarter, which was the strongest observable driver behind the improvement in free cash flow and margin.
The reduction in capital expenditure directly converted a negative free cash flow margin into a positive one in both sequential and year-over-year comparisons.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was unchanged from the prior quarter, while operating cash flow improved modestly and capital expenditure decreased substantially, which together produced a positive free cash flow and margin. The year-ago quarter had a much higher level of capital expenditure that weighed on free cash flow despite higher operating cash flow.
Compared to the immediately preceding quarter, the free cash flow margin improved from negative to positive, driven primarily by lower capital expenditure. Versus the same quarter one year earlier, the margin also moved from negative to positive, as the decline in capital expenditure more than offset the reduction in operating cash flow.
Monitor the trajectory of capital expenditure in upcoming quarters, as its current lower level was the primary factor enabling the positive free cash flow.