Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
The company reported negative free cash flow for the current quarter, with operating cash flow also negative despite a year-over-year revenue increase. The free cash flow margin improved compared to the previous quarter but remained negative and weakened from the same period last year.
- Revenue was higher than both the prior quarter and the year-ago quarter. Operating cash flow, while negative, improved significantly from the prior quarter, but was lower than the positive level a year ago. Capital expenditure increased relative to both comparison periods. The combination resulted in a negative free cash flow and a negative margin, with the margin improved from the prior quarter but lower than the year-ago period.
- Sequentially, operating cash flow and free cash flow both improved, with the free cash flow margin rising from the prior quarter. Compared to the same quarter last year, operating cash flow and free cash flow both weakened, and the margin turned from positive to negative.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$357.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$99.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
-$9.0M
Cash generated by operations before capital spending.
CapEx
$90.0M
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 | $2.8B | $335.0M | $53.0M | $282.0M | 10.0% |
| 2023-12-31 | $3.2B | $562.0M | $114.0M | $448.0M | 14.1% |
| 2024-03-31 | $2.8B | -$202.0M | $72.0M | -$274.0M | -9.8% |
| 2024-06-30 | $3.0B | -$9.0M | $90.0M | -$99.0M | -3.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -57.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.0% | 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 recovery
Operating cash flow moved from a large negative value in the prior quarter to a smaller negative value, reflecting a substantial reduction in cash used in operations.
The narrower operating cash outflow directly improved free cash flow relative to the preceding quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher than both the prior quarter and the year-ago quarter. Operating cash flow, while negative, improved significantly from the prior quarter, but was lower than the positive level a year ago. Capital expenditure increased relative to both comparison periods. The combination resulted in a negative free cash flow and a negative margin, with the margin improved from the prior quarter but lower than the year-ago period.
Sequentially, operating cash flow and free cash flow both improved, with the free cash flow margin rising from the prior quarter. Compared to the same quarter last year, operating cash flow and free cash flow both weakened, and the margin turned from positive to negative.
Monitor the trend in trade working capital, which the filing indicated was a significant use of cash during the first half of the current year.