Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue increased compared to the prior quarter and the same quarter last year, but operating cash flow declined sharply, resulting in a negative free cash flow margin. The drop in operating cash flow was primarily attributed to higher income tax payments connected to a divestiture, as stated in the filing.
- Revenue was higher sequentially and year over year, yet operating cash flow was very low, and capital expenditure remained elevated. The combination produced a negative free cash flow and a negative margin, indicating weak cash conversion from sales.
- Compared to the preceding quarter, revenue improved while operating cash flow weakened, free cash flow turned more negative, and the margin decreased. Versus the same quarter one year earlier, revenue was higher, but operating cash flow, free cash flow, and margin all deteriorated significantly.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$319.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$138.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.0M
Cash generated by operations before capital spending.
CapEx
$139.0M
Capital spending and related asset purchases.
FCF margin
-7.0%
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 | $2.0B | $454.0M | $171.0M | $283.0M | 14.2% |
| 2023-12-31 | $682.0M | $555.0M | $353.0M | $202.0M | 29.6% |
| 2024-03-31 | $1.1B | $172.0M | $200.0M | -$28.0M | -2.7% |
| 2024-06-30 | $2.0B | $1.0M | $139.0M | -$138.0M | -7.0% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -46.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 7.1% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$4.2B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Higher income tax payments
The filing states that the year-over-year decline in operating cash flow was driven largely by significantly higher income tax payments in the current period resulting from the divestiture. This external factor constrained cash generation despite higher revenue.
This higher tax outlay directly reduced operating cash flow and caused free cash flow to turn negative for the quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher sequentially and year over year, yet operating cash flow was very low, and capital expenditure remained elevated. The combination produced a negative free cash flow and a negative margin, indicating weak cash conversion from sales.
Compared to the preceding quarter, revenue improved while operating cash flow weakened, free cash flow turned more negative, and the margin decreased. Versus the same quarter one year earlier, revenue was higher, but operating cash flow, free cash flow, and margin all deteriorated significantly.
Monitor the trajectory of income tax payments and their effect on operating cash flow in subsequent quarters.