Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
The company's cash conversion strengthened materially this quarter, with free cash flow margin rising sharply versus the prior sequential quarter. Revenue growth and a significant improvement in operating cash flow were the primary drivers, while capital expenditure declined modestly.
- Operating cash flow increased substantially compared to both the previous quarter and the same quarter last year, while capital expenditure rose from the year-ago level but fell sequentially. This combination drove free cash flow higher and expanded the free cash flow margin meaningfully relative to both comparison periods.
- Compared to the prior quarter, free cash flow and margin improved sharply on higher operating cash flow and lower capital expenditure. Versus the same quarter one year earlier, free cash flow and margin also improved, supported by higher revenue and operating cash flow despite increased capital spending.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.5B
Trailing twelve-month free cash flow.
Quarter free cash flow
$951.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.4B
Cash generated by operations before capital spending.
CapEx
$479.0M
Capital spending and related asset purchases.
FCF margin
19.4%
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 |
|---|---|---|---|---|---|
| 2023-09-30 | $4.2B | $920.0M | $398.0M | $522.0M | 12.5% |
| 2023-12-31 | $5.2B | $1.5B | $603.0M | $905.0M | 17.3% |
| 2024-03-31 | $4.8B | $596.0M | $512.0M | $84.0M | 1.8% |
| 2024-06-30 | $4.9B | $1.4B | $479.0M | $951.0M | 19.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 121.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 9.8% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$21.7B | 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 Surge
Operating cash flow increased significantly from both the prior quarter and the year-ago quarter, more than offsetting the sequential decline in capital expenditure and providing the primary lift to free cash flow.
The stronger operating cash flow was the single most observable factor behind the improvement in 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.
Operating cash flow increased substantially compared to both the previous quarter and the same quarter last year, while capital expenditure rose from the year-ago level but fell sequentially. This combination drove free cash flow higher and expanded the free cash flow margin meaningfully relative to both comparison periods.
Compared to the prior quarter, free cash flow and margin improved sharply on higher operating cash flow and lower capital expenditure. Versus the same quarter one year earlier, free cash flow and margin also improved, supported by higher revenue and operating cash flow despite increased capital spending.
Monitor capital expenditure trends, as the sequential decline helped boost free cash flow but spending remained above the year-ago level.