Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue remained stable compared to the same period last year and improved from the prior quarter. However, free cash flow weakened sequentially due to lower operating cash flow and higher capital expenditure, resulting in a lower free cash flow margin.
- Operating cash flow matched the year-ago level but fell from the previous quarter, while capital expenditure increased over both periods. This combination led to free cash flow similar to last year but lower sequentially, and the free cash flow margin declined compared to both the prior quarter and the year-ago quarter.
- Compared to the immediately preceding quarter, revenue rose but operating cash flow, free cash flow, and margin all weakened, with capital expenditure higher. Versus the same quarter a year ago, revenue, operating cash flow, free cash flow, and margin were all stable or slightly weaker, while capital expenditure was higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$7.1B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.1B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.7B
Cash generated by operations before capital spending.
CapEx
$628.0M
Capital spending and related asset purchases.
FCF margin
16.3%
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 | $6.7B | $3.0B | $570.0M | $2.5B | 36.7% |
| 2023-12-31 | $6.4B | $2.5B | $757.0M | $1.7B | 27.0% |
| 2024-03-31 | $6.2B | $2.4B | $547.0M | $1.8B | 29.9% |
| 2024-06-30 | $6.5B | $1.7B | $628.0M | $1.1B | 16.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 52.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 9.7% | 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 Decrease
Operating cash flow fell from the prior quarter, which was the main factor behind the sequential decline in free cash flow and free cash flow margin. Year-over-year operating cash flow was unchanged.
Continued weakness in operating cash flow could constrain future free cash flow if capital expenditure remains elevated.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow matched the year-ago level but fell from the previous quarter, while capital expenditure increased over both periods. This combination led to free cash flow similar to last year but lower sequentially, and the free cash flow margin declined compared to both the prior quarter and the year-ago quarter.
Compared to the immediately preceding quarter, revenue rose but operating cash flow, free cash flow, and margin all weakened, with capital expenditure higher. Versus the same quarter a year ago, revenue, operating cash flow, free cash flow, and margin were all stable or slightly weaker, while capital expenditure was higher.
Monitor the trajectory of capital expenditure, as its increase contributed to the sequential compression of free cash flow and margin.