Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
The quarter's free cash flow margin improved significantly from the prior quarter but remained lower than the same quarter last year. The increase in operating cash flow drove the sequential improvement, while capital expenditure was relatively stable.
- Revenue grew compared to both the prior quarter and the year-ago quarter. Operating cash flow increased sharply from the prior quarter, resulting in a higher free cash flow margin, but operating cash flow was lower than the year-ago level, leading to a weaker free cash flow margin year over year.
- Compared to the immediately preceding quarter, free cash flow and margin improved substantially due to higher operating cash flow. Versus the same quarter one year earlier, free cash flow and margin were lower despite higher revenue, as operating cash flow declined.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.8B
Trailing twelve-month free cash flow.
Quarter free cash flow
$481.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$633.0M
Cash generated by operations before capital spending.
CapEx
$152.0M
Capital spending and related asset purchases.
FCF margin
8.9%
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 | $4.9B | $1.1B | $148.0M | $902.0M | 18.4% |
| 2023-12-31 | $5.8B | $1.5B | $145.0M | $1.4B | 23.8% |
| 2024-03-31 | $5.2B | $204.0M | $167.0M | $37.0M | 0.7% |
| 2024-06-30 | $5.4B | $633.0M | $152.0M | $481.0M | 8.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 58.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.8% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$10.3B | 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 Increase
Operating cash flow increased substantially from the prior quarter, far outpacing the revenue growth, while capital expenditure remained similar. This was the primary factor behind the sharp improvement in free cash flow and margin.
The large sequential increase in operating cash flow drove free cash flow margin from a minimal level to a much healthier level.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue grew compared to both the prior quarter and the year-ago quarter. Operating cash flow increased sharply from the prior quarter, resulting in a higher free cash flow margin, but operating cash flow was lower than the year-ago level, leading to a weaker free cash flow margin year over year.
Compared to the immediately preceding quarter, free cash flow and margin improved substantially due to higher operating cash flow. Versus the same quarter one year earlier, free cash flow and margin were lower despite higher revenue, as operating cash flow declined.
Monitor the trajectory of operating cash flow, as it is the key variable behind the sequential improvement but also the year-over-year decline.