Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue rose compared to both the prior quarter and the same quarter last year, while free cash flow improved sequentially but declined year over year. The free cash flow margin narrowed from the prior quarter and more significantly from the year-ago period.
- Operating cash flow was lower than the prior quarter and the year-ago quarter, despite higher revenue. Capital expenditure decreased, partially offsetting the decline in operating cash flow, resulting in free cash flow that was higher than the prior quarter but lower than the year-ago quarter, with a corresponding decrease in free cash flow margin.
- Compared to the preceding quarter, revenue increased while operating cash flow decreased, leading to a higher free cash flow due to a larger reduction in capital expenditure. Versus the same quarter last year, revenue was higher but operating cash flow and free cash flow were both lower, with a weakened free cash flow margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$738.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
$167.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$365.0M
Cash generated by operations before capital spending.
CapEx
$198.0M
Capital spending and related asset purchases.
FCF margin
3.1%
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 | $4.6B | $468.0M | $228.0M | $240.0M | 5.2% |
| 2023-12-31 | $1.7B | $492.0M | $305.0M | $187.0M | 10.9% |
| 2024-03-31 | $3.9B | $395.0M | $251.0M | $144.0M | 3.7% |
| 2024-06-30 | $5.4B | $365.0M | $198.0M | $167.0M | 3.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 33.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.6% | 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 compared to both the prior quarter and the year-ago quarter, despite higher revenue. The filing noted that for the first six months, the decrease in operating cash flow was primarily due to the timing of mill outage spending and input pricing on accounts payable, partially offset by lower accounts receivable cash receipts from the timing of sales.
This could continue to weigh on free cash flow if the timing effects persist.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow was lower than the prior quarter and the year-ago quarter, despite higher revenue. Capital expenditure decreased, partially offsetting the decline in operating cash flow, resulting in free cash flow that was higher than the prior quarter but lower than the year-ago quarter, with a corresponding decrease in free cash flow margin.
Compared to the preceding quarter, revenue increased while operating cash flow decreased, leading to a higher free cash flow due to a larger reduction in capital expenditure. Versus the same quarter last year, revenue was higher but operating cash flow and free cash flow were both lower, with a weakened free cash flow margin.
Monitor the impact of mill outage spending timing and input pricing on accounts payable, as these factors were cited in the filing for the decline in operating cash flow for the first half of the year.