Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow margin weakened substantially versus both the preceding quarter and the same quarter last year, driven by lower operating cash flow despite steady revenue. Capital expenditure was lower year over year but could not offset the operating cash flow decline.
- Revenue was essentially unchanged from the prior quarter and slightly lower than the year-ago quarter, but operating cash flow declined significantly in both comparisons, leading to a lower free cash flow margin of 6.5%. Capital expenditure as a share of revenue was broadly similar to the prior quarter but lower than the year-ago period.
- Compared with the prior quarter, free cash flow and its margin declined notably as operating cash flow decreased substantially while revenue was stable. Versus the year-ago quarter, free cash flow and margin also weakened, driven by lower operating cash flow and slightly lower revenue.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$4.7B
Trailing twelve-month free cash flow.
Quarter free cash flow
$392.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$767.0M
Cash generated by operations before capital spending.
CapEx
$375.0M
Capital spending and related asset purchases.
FCF margin
6.5%
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 |
|---|---|---|---|---|---|
| 2023-06-30 | $6.3B | $1.5B | $377.0M | $1.1B | 18.0% |
| 2023-09-30 | $6.3B | $1.9B | $405.0M | $1.5B | 24.0% |
| 2023-12-31 | $6.0B | $2.0B | $358.0M | $1.6B | 27.1% |
| 2024-03-31 | $6.0B | $767.0M | $375.0M | $392.0M | 6.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 42.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 6.2% | 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 Decline
Operating cash flow fell sharply from both the prior quarter and the year-ago quarter, while revenue was essentially flat. This was the primary factor behind the weakened free cash flow margin.
The decline in operating cash flow was the strongest observable driver of the lower free cash flow and margin this quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was essentially unchanged from the prior quarter and slightly lower than the year-ago quarter, but operating cash flow declined significantly in both comparisons, leading to a lower free cash flow margin of 6.5%. Capital expenditure as a share of revenue was broadly similar to the prior quarter but lower than the year-ago period.
Compared with the prior quarter, free cash flow and its margin declined notably as operating cash flow decreased substantially while revenue was stable. Versus the year-ago quarter, free cash flow and margin also weakened, driven by lower operating cash flow and slightly lower revenue.
Monitor the trajectory of operating cash flow given its material decline from both comparison periods while revenue held steady.