Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned positive from a negative prior quarter, though it was significantly lower than the same quarter last year. Operating cash flow improved sequentially but fell year over year, while capital expenditure decreased from the previous quarter but increased compared to a year ago.
- The free cash flow margin improved from a negative prior quarter to a positive level, driven by higher operating cash flow and lower capital expenditure relative to the previous quarter. Compared to the same quarter last year, the margin weakened as operating cash flow was lower and capital expenditure was higher.
- Sequentially, revenue was slightly lower but operating cash flow was higher, capital expenditure was lower, and free cash flow turned from negative to positive. Compared to the same quarter last year, revenue was slightly lower, operating cash flow and free cash flow were lower, capital expenditure was higher, and margin weakened.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$389.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
$282.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$839.0M
Cash generated by operations before capital spending.
CapEx
$557.0M
Capital spending and related asset purchases.
FCF margin
9.4%
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 |
|---|---|---|---|---|---|
| 2023-06-30 | $3.0B | $673.0M | $520.0M | $153.0M | 5.1% |
| 2023-09-30 | $3.0B | $660.0M | $543.0M | $117.0M | 3.9% |
| 2023-12-31 | $3.1B | $673.0M | $836.0M | -$163.0M | -5.3% |
| 2024-03-31 | $3.0B | $839.0M | $557.0M | $282.0M | 9.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 532.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 18.5% | 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.
Sequential operating cash flow recovery
Operating cash flow improved compared to the prior quarter, providing the primary lift to free cash flow turning positive. This sequential recovery occurred despite slightly lower revenue.
It enabled a shift from negative to positive 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.
The free cash flow margin improved from a negative prior quarter to a positive level, driven by higher operating cash flow and lower capital expenditure relative to the previous quarter. Compared to the same quarter last year, the margin weakened as operating cash flow was lower and capital expenditure was higher.
Sequentially, revenue was slightly lower but operating cash flow was higher, capital expenditure was lower, and free cash flow turned from negative to positive. Compared to the same quarter last year, revenue was slightly lower, operating cash flow and free cash flow were lower, capital expenditure was higher, and margin weakened.
Monitor the trend of capital expenditure relative to operating cash flow, as it shifted from lower to higher year over year.