Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow improved sharply from the prior quarter, driven by a significant increase in operating cash flow. However, free cash flow was lower than the same quarter last year, as capital expenditure rose.
- Revenue was higher than both the prior quarter and the year-ago quarter. Operating cash flow improved from the prior quarter but was lower than the year-ago quarter. Capital expenditure increased compared to both periods, resulting in free cash flow that was higher than the prior quarter but lower than the year-ago quarter. Free cash flow margin strengthened from the prior quarter but weakened from the year-ago quarter.
- Compared to the immediately preceding quarter, free cash flow and free cash flow margin improved substantially, driven by higher operating cash flow. Compared to the same quarter one year earlier, free cash flow and free cash flow margin were lower, as operating cash flow decreased and capital expenditure increased.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$419.5M
Trailing twelve-month free cash flow.
Quarter free cash flow
$311.1M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$620.5M
Cash generated by operations before capital spending.
CapEx
$309.4M
Capital spending and related asset purchases.
FCF margin
15.5%
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 | $1.7B | $548.4M | $256.3M | $292.1M | 16.8% |
| 2023-12-31 | $1.9B | $228.3M | $435.5M | -$207.2M | -10.7% |
| 2024-03-31 | $1.9B | $265.4M | $241.9M | $23.5M | 1.2% |
| 2024-06-30 | $2.0B | $620.5M | $309.4M | $311.1M | 15.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 59.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 15.4% | 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 Recovery
Operating cash flow in the current quarter was higher than the prior quarter, driving a substantial improvement in free cash flow. This was the strongest observable driver of the quarter's cash conversion performance.
The increase in operating cash flow was the primary factor behind the improvement in free cash flow and free cash flow margin compared to the prior 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 improved from the prior quarter but was lower than the year-ago quarter. Capital expenditure increased compared to both periods, resulting in free cash flow that was higher than the prior quarter but lower than the year-ago quarter. Free cash flow margin strengthened from the prior quarter but weakened from the year-ago quarter.
Compared to the immediately preceding quarter, free cash flow and free cash flow margin improved substantially, driven by higher operating cash flow. Compared to the same quarter one year earlier, free cash flow and free cash flow margin were lower, as operating cash flow decreased and capital expenditure increased.
Monitor the trend in capital expenditure, which was higher in the current quarter compared to both the prior quarter and the year-ago quarter.