Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue increased compared to both the prior quarter and the same quarter last year, while operating cash flow declined. The company disclosed that its disclosure controls and procedures were effective and that there was no material change in internal control over financial reporting during the quarter.
- Cash conversion weakened as operating cash flow fell while revenue rose, resulting in a lower free cash flow margin. Capital expenditure decreased, but the drop in operating cash flow had a larger impact, leading to a decline in free cash flow.
- Compared to the prior quarter, free cash flow and margin significantly decreased due to lower operating cash flow despite higher revenue. Relative to the same quarter a year ago, free cash flow and margin also declined, as operating cash flow was lower and capital expenditure was reduced.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$12.7B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.8B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$2.1B
Cash generated by operations before capital spending.
CapEx
$220.0M
Capital spending and related asset purchases.
FCF margin
11.7%
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 | $14.8B | $3.1B | $281.0M | $2.8B | 18.8% |
| 2023-12-31 | $17.4B | $4.5B | $300.0M | $4.2B | 24.0% |
| 2024-03-31 | $14.5B | $4.2B | $239.0M | $3.9B | 27.2% |
| 2024-06-30 | $15.8B | $2.1B | $220.0M | $1.8B | 11.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 100.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.4% | 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 Decline
Operating cash flow decreased from the prior quarter and from the year-ago period, while revenue increased. This was the primary factor behind the reduction in free cash flow.
The lower operating cash flow reduced free cash flow and margin, despite higher revenue and lower capital expenditure.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Cash conversion weakened as operating cash flow fell while revenue rose, resulting in a lower free cash flow margin. Capital expenditure decreased, but the drop in operating cash flow had a larger impact, leading to a decline in free cash flow.
Compared to the prior quarter, free cash flow and margin significantly decreased due to lower operating cash flow despite higher revenue. Relative to the same quarter a year ago, free cash flow and margin also declined, as operating cash flow was lower and capital expenditure was reduced.
Monitor the trend of operating cash flow relative to revenue, as the current quarter shows a significant decline in conversion.