Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
In the quarter ended June 2024, free cash flow margin contracted markedly as operating cash flow declined despite a modest revenue increase. The margin was lower than both the preceding quarter and the same quarter one year earlier.
- Revenue improved, but operating cash flow decreased, resulting in lower free cash flow and a compressed free cash flow margin. Capital expenditure increased slightly relative to the prior quarter.
- Compared to the immediately preceding quarter, operating cash flow and free cash flow were lower while revenue was higher. Versus the same quarter one year earlier, both operating cash flow and free cash flow declined, despite a slight increase in revenue.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$6.9B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.2B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.3B
Cash generated by operations before capital spending.
CapEx
$130.0M
Capital spending and related asset purchases.
FCF margin
17.2%
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 |
|---|---|---|---|---|---|
| 2023-09-30 | $7.1B | $1.8B | $122.0M | $1.6B | 23.2% |
| 2023-12-31 | $7.1B | $2.2B | $215.0M | $2.0B | 27.5% |
| 2024-03-31 | $6.7B | $2.2B | $105.0M | $2.1B | 31.6% |
| 2024-06-30 | $7.0B | $1.3B | $130.0M | $1.2B | 17.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 74.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.9% | 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 Pressure
Operating cash flow declined both sequentially and year-over-year even as revenue rose, compressing the free cash flow margin. The filing notes that operating activities in the first half of 2024 were affected by non-cash charges related to an acquisition.
Continued weakness in operating cash flow could limit free cash flow generation and flexibility.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue improved, but operating cash flow decreased, resulting in lower free cash flow and a compressed free cash flow margin. Capital expenditure increased slightly relative to the prior quarter.
Compared to the immediately preceding quarter, operating cash flow and free cash flow were lower while revenue was higher. Versus the same quarter one year earlier, both operating cash flow and free cash flow declined, despite a slight increase in revenue.
Monitor operating cash flow trends as the company integrates recent acquisitions, which may affect cash generation.