Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was stable compared to the prior quarter but lower than the same quarter last year. Free cash flow turned positive from negative in both comparison periods, supported by higher operating cash flow and lower capital expenditure.
- Operating cash flow improved relative to revenue, while capital expenditure decreased, resulting in a positive free cash flow margin. The conversion from revenue to free cash flow strengthened compared to both the prior quarter and the year-ago quarter.
- Compared to the immediately preceding quarter, revenue was slightly higher, operating cash flow was higher, capital expenditure was lower, and free cash flow improved from negative to positive. Compared to the same quarter one year earlier, revenue was lower, operating cash flow was higher, capital expenditure was lower, and free cash flow improved from negative to positive.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.5B
Trailing twelve-month free cash flow.
Quarter free cash flow
$507.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.6B
Cash generated by operations before capital spending.
CapEx
$1.1B
Capital spending and related asset purchases.
FCF margin
13.3%
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 | $4.5B | $1.9B | $1.5B | $442.0M | 9.8% |
| 2023-12-31 | $4.1B | $1.9B | $1.1B | $776.0M | 19.0% |
| 2024-03-31 | $3.7B | $1.0B | $1.2B | -$231.0M | -6.3% |
| 2024-06-30 | $3.8B | $1.6B | $1.1B | $507.0M | 13.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 45.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 27.8% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$11.2B | 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 Improvement
Operating cash flow increased compared to both the prior quarter and the year-ago quarter, while revenue was lower year over year. This improvement was the primary factor behind the swing to positive free cash flow.
Higher operating cash flow, combined with lower capital expenditure, drove free cash flow from negative to positive.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow improved relative to revenue, while capital expenditure decreased, resulting in a positive free cash flow margin. The conversion from revenue to free cash flow strengthened compared to both the prior quarter and the year-ago quarter.
Compared to the immediately preceding quarter, revenue was slightly higher, operating cash flow was higher, capital expenditure was lower, and free cash flow improved from negative to positive. Compared to the same quarter one year earlier, revenue was lower, operating cash flow was higher, capital expenditure was lower, and free cash flow improved from negative to positive.
Monitor the level of capital expenditure, as it remains elevated relative to operating cash flow despite the sequential decline.