Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
In the quarter ended June 30, 2024, free cash flow turned strongly positive, supported by a significant improvement in operating cash flow. Revenue increased modestly, while capital expenditure rose, but the overall cash conversion strengthened markedly.
- Operating cash flow improved substantially from the prior quarter and the year-ago quarter, driving free cash flow to a positive margin. Capital expenditure increased compared to both periods, but the rise in operating cash flow more than offset the higher investment outlay.
- Compared to the immediately preceding quarter, revenue was higher and operating cash flow turned from negative to positive, resulting in a free cash flow margin that improved from negative to positive. Versus the same quarter one year earlier, revenue was higher, operating cash flow was significantly higher, and free cash flow also turned from negative to positive.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$571.8M
Trailing twelve-month free cash flow.
Quarter free cash flow
$286.1M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$371.5M
Cash generated by operations before capital spending.
CapEx
$85.4M
Capital spending and related asset purchases.
FCF margin
20.9%
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 | $1.2B | $411.5M | $55.3M | $356.2M | 29.4% |
| 2023-12-31 | $1.3B | $136.6M | $88.3M | $48.3M | 3.8% |
| 2024-03-31 | $1.3B | -$53.5M | $65.3M | -$118.8M | -8.9% |
| 2024-06-30 | $1.4B | $371.5M | $85.4M | $286.1M | 20.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 77.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 6.2% | 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 Recovery
Operating cash flow rose substantially from both the prior quarter and the year-ago quarter, shifting from negative to positive. This was the primary factor behind the improvement in free cash flow and margin.
The recovery in operating cash flow was the strongest observable driver, enabling the company to generate positive free cash flow after two consecutive quarters of negative free cash flow.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow improved substantially from the prior quarter and the year-ago quarter, driving free cash flow to a positive margin. Capital expenditure increased compared to both periods, but the rise in operating cash flow more than offset the higher investment outlay.
Compared to the immediately preceding quarter, revenue was higher and operating cash flow turned from negative to positive, resulting in a free cash flow margin that improved from negative to positive. Versus the same quarter one year earlier, revenue was higher, operating cash flow was significantly higher, and free cash flow also turned from negative to positive.
Monitor the sustainability of operating cash flow levels, as the current quarter's performance represents a sharp reversal from prior periods.