Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Ecolab's free cash flow and margin decreased compared to both the preceding quarter and the same quarter one year earlier, as operating cash flow was lower and capital expenditure was higher. Revenue was stable versus the preceding quarter and higher year over year.
- Revenue was stable relative to the preceding quarter and higher than the year-ago period. Operating cash flow was lower than both prior periods, while capital expenditure was higher. As a result, free cash flow and free cash flow margin weakened sequentially and year over year.
- Compared to the preceding quarter, free cash flow and margin were lower, driven by a decrease in operating cash flow and a larger increase in capital expenditure. Versus the same quarter one year earlier, both free cash flow and margin also declined, with operating cash flow down and capital expenditure up.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.8B
Trailing twelve-month free cash flow.
Quarter free cash flow
$407.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$766.7M
Cash generated by operations before capital spending.
CapEx
$359.7M
Capital spending and related asset purchases.
FCF margin
10.2%
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 |
|---|---|---|---|---|---|
| 2024-03-31 | $3.8B | $649.4M | $201.5M | $447.9M | 11.9% |
| 2024-06-30 | $4.0B | $611.1M | $196.9M | $414.2M | 10.4% |
| 2024-09-30 | $4.0B | $786.7M | $236.4M | $550.3M | 13.8% |
| 2024-12-31 | $4.0B | $766.7M | $359.7M | $407.0M | 10.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 86.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 9.0% | 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.
Capital expenditure increase
Capital expenditure in the current quarter was higher than both the preceding quarter and the same quarter one year earlier, which was the strongest observable factor pressuring free cash flow. Operating cash flow was lower, but the rise in capital spending amplified the reduction in free cash flow.
The higher capital expenditure reduced free cash flow and margin relative to both prior periods despite stable revenue.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was stable relative to the preceding quarter and higher than the year-ago period. Operating cash flow was lower than both prior periods, while capital expenditure was higher. As a result, free cash flow and free cash flow margin weakened sequentially and year over year.
Compared to the preceding quarter, free cash flow and margin were lower, driven by a decrease in operating cash flow and a larger increase in capital expenditure. Versus the same quarter one year earlier, both free cash flow and margin also declined, with operating cash flow down and capital expenditure up.
Monitor the level of capital expenditure relative to operating cash flow, as the increase in the current quarter contributed to the weakened free cash flow.