Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Lennox generated positive free cash flow this quarter, marking a significant improvement from the prior quarter's negative free cash flow. Revenue was higher both sequentially and compared to the same period last year, while the free cash flow margin remained stable year over year.
- Operating cash flow turned positive from the prior quarter's negative level, providing the foundation for free cash flow generation. Capital expenditure was lower than a year ago, which supported the free cash flow margin.
- Compared to the immediately preceding quarter, all metrics improved, with revenue higher and cash flow turning positive. Versus the same quarter one year earlier, revenue increased while operating cash flow was slightly lower, but lower capital expenditure led to a similar free cash flow margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$553.6M
Trailing twelve-month free cash flow.
Quarter free cash flow
$151.3M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$184.0M
Cash generated by operations before capital spending.
CapEx
$32.7M
Capital spending and related asset purchases.
FCF margin
10.4%
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 | $1.4B | $313.2M | $39.7M | $273.5M | 20.0% |
| 2023-12-31 | $1.2B | $306.3M | $125.2M | $181.1M | 15.7% |
| 2024-03-31 | $1.0B | -$22.8M | $29.5M | -$52.3M | -5.0% |
| 2024-06-30 | $1.5B | $184.0M | $32.7M | $151.3M | 10.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 61.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.3% | 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 rebounded from a negative position in the prior quarter to a positive amount this quarter, reflecting improved cash conversion from revenue.
This recovery was the primary driver of the quarter's free cash flow generation.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow turned positive from the prior quarter's negative level, providing the foundation for free cash flow generation. Capital expenditure was lower than a year ago, which supported the free cash flow margin.
Compared to the immediately preceding quarter, all metrics improved, with revenue higher and cash flow turning positive. Versus the same quarter one year earlier, revenue increased while operating cash flow was slightly lower, but lower capital expenditure led to a similar free cash flow margin.
Monitor the sustainability of operating cash flow given the seasonal working capital patterns noted in the filing.