Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned strongly positive this quarter after a negative prior quarter, driven by a large swing in operating cash flow. Revenue was slightly higher than a year ago, but free cash flow margin was lower.
- Operating cash flow of over one billion dollars, combined with capital expenditure of about a quarter billion, yielded free cash flow of nearly one billion dollars. The free cash flow margin of over fifteen percent reflects the conversion of revenue into free cash flow.
- Compared to the prior quarter, operating cash flow improved from negative to positive, and free cash flow turned from negative to positive. Versus the same quarter last year, revenue was slightly higher, operating cash flow was stable, capital expenditure was higher, and free cash flow and free cash flow margin were lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.4B
Trailing twelve-month free cash flow.
Quarter free cash flow
$952.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.2B
Cash generated by operations before capital spending.
CapEx
$250.9M
Capital spending and related asset purchases.
FCF margin
15.2%
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 | $6.1B | $1.3B | $152.9M | $1.2B | 18.9% |
| 2023-12-31 | $5.3B | $918.6M | $319.5M | $599.1M | 11.4% |
| 2024-03-31 | $5.4B | -$58.9M | $283.8M | -$342.7M | -6.4% |
| 2024-06-30 | $6.3B | $1.2B | $250.9M | $952.0M | 15.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 107.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 4.0% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$8.8B | 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
Operating cash flow rebounded strongly from a negative prior quarter to over one billion dollars, which was the primary factor behind the positive free cash flow this quarter.
This recovery drove free cash flow from negative to positive, despite higher capital expenditure.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow of over one billion dollars, combined with capital expenditure of about a quarter billion, yielded free cash flow of nearly one billion dollars. The free cash flow margin of over fifteen percent reflects the conversion of revenue into free cash flow.
Compared to the prior quarter, operating cash flow improved from negative to positive, and free cash flow turned from negative to positive. Versus the same quarter last year, revenue was slightly higher, operating cash flow was stable, capital expenditure was higher, and free cash flow and free cash flow margin were lower.
Monitor the level of capital expenditure relative to the prior year, as it was higher this quarter and reduced free cash flow.