Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue increased from both the prior quarter and the same quarter last year. Free cash flow margin weakened compared to both periods, as operating cash flow growth was outpaced by higher capital expenditure.
- Operating cash flow rose from a year ago but fell from the prior quarter. Capital expenditure increased from both comparison periods, resulting in free cash flow that was lower than the prior quarter but slightly below the year-ago level. The free cash flow margin declined sequentially and year-over-year.
- Compared to the prior quarter, revenue was higher but operating cash flow was lower, and capital expenditure was slightly lower, leading to a lower free cash flow and a weakened margin. Versus the same quarter last year, revenue and operating cash flow were higher, but capital expenditure increased more, resulting in a lower free cash flow and a weakened margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.0B
Trailing twelve-month free cash flow.
Quarter free cash flow
$296.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$811.0M
Cash generated by operations before capital spending.
CapEx
$515.0M
Capital spending and related asset purchases.
FCF margin
7.7%
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 | $3.7B | $1.1B | $335.7M | $742.8M | 19.9% |
| 2023-09-30 | $3.8B | $953.1M | $369.0M | $584.1M | 15.3% |
| 2023-12-31 | $3.8B | $898.7M | $547.8M | $350.9M | 9.2% |
| 2024-03-31 | $3.9B | $811.0M | $515.0M | $296.0M | 7.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 65.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 13.3% | 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 Growth
Capital expenditure increased from both the prior quarter and the year-ago quarter, outpacing the growth in operating cash flow. This was the strongest observable factor behind the decline in free cash flow and margin.
Higher capital expenditure absorbed a larger share of operating cash flow, reducing free cash flow and margin compared to both prior periods.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow rose from a year ago but fell from the prior quarter. Capital expenditure increased from both comparison periods, resulting in free cash flow that was lower than the prior quarter but slightly below the year-ago level. The free cash flow margin declined sequentially and year-over-year.
Compared to the prior quarter, revenue was higher but operating cash flow was lower, and capital expenditure was slightly lower, leading to a lower free cash flow and a weakened margin. Versus the same quarter last year, revenue and operating cash flow were higher, but capital expenditure increased more, resulting in a lower free cash flow and a weakened margin.
Monitor the trajectory of capital expenditure relative to operating cash flow, as the gap widened this quarter and compressed free cash flow margin.