Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow was negative and the margin deteriorated substantially versus both the prior quarter and the same quarter last year. Operating cash flow decreased sharply compared to the prior quarter, while capital expenditure remained at a similar level.
- Revenue was lower sequentially, and operating cash flow declined more than proportionally, driving a much weaker free cash flow margin. Capital expenditure stayed stable, so the conversion shortfall stemmed primarily from reduced operating cash generation.
- Compared to the prior quarter, revenue, operating cash flow, and free cash flow all declined, and the free cash flow margin turned sharply more negative. Versus the same quarter last year, revenue was lower, operating cash flow was markedly lower, and capital expenditure was lower, yet the free cash flow margin worsened.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$2.9B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$1.2B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$669.0M
Cash generated by operations before capital spending.
CapEx
$1.9B
Capital spending and related asset purchases.
FCF margin
-49.4%
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 | $2.9B | $1.4B | $1.8B | -$400.0M | -13.8% |
| 2023-12-31 | $3.2B | $1.1B | $2.3B | -$1.2B | -38.9% |
| 2024-03-31 | $3.7B | $1.9B | $1.9B | -$82.0M | -2.2% |
| 2024-06-30 | $2.5B | $669.0M | $1.9B | -$1.2B | -49.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -169.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 76.4% | 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 Contraction
Operating cash flow was substantially lower than both the prior quarter and the year-ago quarter. This decline was the strongest observable driver of the negative free cash flow result.
Lower operating cash flow directly reduced free cash flow and widened the negative margin, despite capital expenditure remaining relatively stable.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was lower sequentially, and operating cash flow declined more than proportionally, driving a much weaker free cash flow margin. Capital expenditure stayed stable, so the conversion shortfall stemmed primarily from reduced operating cash generation.
Compared to the prior quarter, revenue, operating cash flow, and free cash flow all declined, and the free cash flow margin turned sharply more negative. Versus the same quarter last year, revenue was lower, operating cash flow was markedly lower, and capital expenditure was lower, yet the free cash flow margin worsened.
Monitor the trajectory of operating cash flow, as its sequential decline was the primary factor behind the weaker free cash flow margin.