Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
In the current quarter, the company generated negative free cash flow due to substantial capital expenditures that significantly exceeded operating cash flow. Revenue increased from both the prior quarter and the same quarter last year, but operating cash flow weakened sequentially while improving year-over-year.
- Operating cash flow relative to revenue decreased from the previous quarter, indicating a weaker cash conversion rate, though it improved compared to the same quarter a year earlier. Capital expenditures remained elevated, resulting in a free cash flow margin that was negative and worse sequentially but stable compared to the prior year.
- Compared to the immediately preceding quarter, revenue was higher but operating cash flow was lower, leading to a larger free cash flow deficit. Versus the same quarter one year ago, both revenue and operating cash flow were higher, and the free cash flow deficit was of similar magnitude.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$338.6M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$143.2M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$252.9M
Cash generated by operations before capital spending.
CapEx
$396.1M
Capital spending and related asset purchases.
FCF margin
-9.2%
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 |
|---|---|---|---|---|---|
| 2023-12-31 | $1.4B | $447.2M | $376.9M | $70.3M | 4.9% |
| 2024-03-31 | $1.5B | $130.0M | $381.1M | -$251.1M | -17.0% |
| 2024-06-30 | $1.5B | $382.2M | $396.8M | -$14.6M | -1.0% |
| 2024-09-30 | $1.6B | $252.9M | $396.1M | -$143.2M | -9.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 425.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 25.4% | 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.
Ongoing Capital Investments
The company is investing in a global program to transform its operating model, which has resulted in high capital expenditure. These capital outflows are a primary factor behind the negative free cash flow.
High capital expenditure relative to operating cash flow directly pressures free cash flow, making it negative in the current period.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow relative to revenue decreased from the previous quarter, indicating a weaker cash conversion rate, though it improved compared to the same quarter a year earlier. Capital expenditures remained elevated, resulting in a free cash flow margin that was negative and worse sequentially but stable compared to the prior year.
Compared to the immediately preceding quarter, revenue was higher but operating cash flow was lower, leading to a larger free cash flow deficit. Versus the same quarter one year ago, both revenue and operating cash flow were higher, and the free cash flow deficit was of similar magnitude.
Monitor the level of capital spending and its impact on free cash flow as the company continues its restructuring program.