Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue and operating cash flow both improved compared to the prior quarter and the same quarter last year. However, free cash flow turned negative due to a significant increase in capital expenditure.
- Operating cash flow as a share of revenue was lower than the prior quarter but higher than a year ago. The free cash flow margin turned negative, reflecting capital expenditure exceeding operating cash flow.
- Compared to the prior quarter, revenue and operating cash flow were higher, but capital expenditure was substantially higher, causing free cash flow to shift from positive to negative. Versus the same quarter last year, revenue and operating cash flow were higher, capital expenditure was higher, and free cash flow weakened from positive to negative.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$555.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$567.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.6B
Cash generated by operations before capital spending.
CapEx
$2.1B
Capital spending and related asset purchases.
FCF margin
-13.8%
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 |
|---|---|---|---|---|---|
| 2023-09-30 | $4.2B | $659.0M | $281.0M | $378.0M | 9.1% |
| 2023-12-31 | $3.3B | $1.1B | $2.6B | -$1.5B | -43.6% |
| 2024-03-31 | $3.7B | $1.3B | $242.0M | $1.1B | 29.1% |
| 2024-06-30 | $4.1B | $1.6B | $2.1B | -$567.0M | -13.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -66.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 52.1% | 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.
Capital Expenditure Surge
Capital expenditure rose sharply compared to both the prior quarter and the same quarter last year, far outpacing the growth in operating cash flow.
This drove free cash flow from a positive position in both comparison periods to a negative figure in the current quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a share of revenue was lower than the prior quarter but higher than a year ago. The free cash flow margin turned negative, reflecting capital expenditure exceeding operating cash flow.
Compared to the prior quarter, revenue and operating cash flow were higher, but capital expenditure was substantially higher, causing free cash flow to shift from positive to negative. Versus the same quarter last year, revenue and operating cash flow were higher, capital expenditure was higher, and free cash flow weakened from positive to negative.
Monitor the level of capital expenditure in future quarters, as its increase was the primary factor behind the negative free cash flow.