Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue and operating cash flow were both higher than the prior quarter, driving an increase in free cash flow. The free cash flow margin improved from the previous quarter but weakened compared to the same quarter one year earlier.
- Operating cash flow was sufficiently high relative to revenue, and capital expenditure remained modest, resulting in a free cash flow figure that represented a meaningful portion of revenue, as reflected in the margin.
- Compared to the immediately preceding quarter, revenue and operating cash flow increased, while capital expenditure was slightly lower, contributing to a higher free cash flow and an improved margin. Versus the same quarter one year earlier, revenue and operating cash flow were higher, but capital expenditure was also higher, and the margin weakened due to a proportionally greater increase in capital expenditure relative to the change in operating cash flow.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$6.9B
Trailing twelve-month free cash flow.
Quarter free cash flow
$2.1B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$2.2B
Cash generated by operations before capital spending.
CapEx
$75.7M
Capital spending and related asset purchases.
FCF margin
22.8%
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 | $8.2B | $1.4B | $101.0M | $1.3B | 16.4% |
| 2023-09-30 | $8.5B | $2.0B | $103.9M | $1.9B | 22.1% |
| 2023-12-31 | $8.8B | $1.7B | $81.6M | $1.6B | 17.9% |
| 2024-03-31 | $9.4B | $2.2B | $75.7M | $2.1B | 22.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 91.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.8% | 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.
Revenue Growth Supporting Cash Generation
Revenue was higher than both the prior quarter and the year-ago quarter. Operating cash flow rose sequentially, matching the year-ago level, while free cash flow increased sequentially, producing a stronger margin than the prior quarter.
The sequential improvement in free cash flow and margin was the strongest observable direction among the metrics.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow was sufficiently high relative to revenue, and capital expenditure remained modest, resulting in a free cash flow figure that represented a meaningful portion of revenue, as reflected in the margin.
Compared to the immediately preceding quarter, revenue and operating cash flow increased, while capital expenditure was slightly lower, contributing to a higher free cash flow and an improved margin. Versus the same quarter one year earlier, revenue and operating cash flow were higher, but capital expenditure was also higher, and the margin weakened due to a proportionally greater increase in capital expenditure relative to the change in operating cash flow.
Monitor the trajectory of capital expenditure relative to operating cash flow, as its increase was associated with a lower margin versus the year-ago period.