Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned sharply positive with a strong margin, supported by a substantial increase in operating cash flow. Revenue grew compared to both the prior quarter and the same quarter last year, while capital expenditure remained relatively stable.
- Operating cash flow was high relative to revenue, and after deducting capital expenditure, the resulting free cash flow margin was notably positive. This marks a significant improvement in cash conversion efficiency compared to the previous quarter when free cash flow was negative.
- Compared to the prior quarter, revenue was higher, operating cash flow improved substantially, and free cash flow turned from negative to positive with a much stronger margin. Versus the same quarter a year ago, revenue, operating cash flow, free cash flow, and margin were all higher, while capital expenditure was slightly higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$10.1B
Trailing twelve-month free cash flow.
Quarter free cash flow
$4.3B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$4.6B
Cash generated by operations before capital spending.
CapEx
$370.0M
Capital spending and related asset purchases.
FCF margin
45.0%
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 | $9.1B | $3.4B | $371.0M | $3.0B | 33.3% |
| 2023-12-31 | $9.0B | $3.3B | $311.0M | $3.0B | 33.1% |
| 2024-03-31 | $8.8B | $241.0M | $417.0M | -$176.0M | -2.0% |
| 2024-06-30 | $9.5B | $4.6B | $370.0M | $4.3B | 45.0% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 177.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.9% | 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 Recovery
The primary driver of the quarter's free cash flow was the strong recovery in operating cash flow, which moved from a low level in the prior quarter to a much higher level. This change was the single largest observable factor behind the swing from negative to positive free cash flow.
The improved operating cash flow directly enabled a positive free cash flow and a high free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow was high relative to revenue, and after deducting capital expenditure, the resulting free cash flow margin was notably positive. This marks a significant improvement in cash conversion efficiency compared to the previous quarter when free cash flow was negative.
Compared to the prior quarter, revenue was higher, operating cash flow improved substantially, and free cash flow turned from negative to positive with a much stronger margin. Versus the same quarter a year ago, revenue, operating cash flow, free cash flow, and margin were all higher, while capital expenditure was slightly higher.
Monitor the sustainability of operating cash flow, given the large swing from the prior quarter, and the relationship between capital expenditure and free cash flow conversion.