Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow declined from both the prior quarter and the same quarter last year, as operating cash flow decreased while capital expenditure increased. The free cash flow margin weakened accordingly, despite revenue remaining stable.
- Revenue was unchanged from the prior quarter and the year-ago quarter. Operating cash flow was lower than both periods, while capital expenditure was higher. Consequently, free cash flow and free cash flow margin both decreased.
- Compared to the prior quarter, operating cash flow and free cash flow were lower, and capital expenditure was higher, leading to a weaker free cash flow margin. Versus the same quarter a year earlier, the same pattern held. The company's filing notes that for the first six months, operating cash flow increased year-over-year due to the absence of prior-year labor union payments and higher net income, partially offset by higher income tax payments, indicating a different trend in the quarter alone.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$4.9B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.0B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.9B
Cash generated by operations before capital spending.
CapEx
$902.0M
Capital spending and related asset purchases.
FCF margin
16.8%
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 | $5.9B | $2.1B | $975.0M | $1.2B | 19.4% |
| 2023-12-31 | $6.2B | $2.4B | $1.0B | $1.4B | 22.3% |
| 2024-03-31 | $6.0B | $2.1B | $797.0M | $1.3B | 22.0% |
| 2024-06-30 | $6.0B | $1.9B | $902.0M | $1.0B | 16.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 60.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 15.0% | 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 increase
Capital expenditure rose compared to both the prior quarter and the same quarter last year, while operating cash flow fell. This combination drove free cash flow lower.
The higher capital outlay, alongside lower operating cash flow, compressed free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was unchanged from the prior quarter and the year-ago quarter. Operating cash flow was lower than both periods, while capital expenditure was higher. Consequently, free cash flow and free cash flow margin both decreased.
Compared to the prior quarter, operating cash flow and free cash flow were lower, and capital expenditure was higher, leading to a weaker free cash flow margin. Versus the same quarter a year earlier, the same pattern held. The company's filing notes that for the first six months, operating cash flow increased year-over-year due to the absence of prior-year labor union payments and higher net income, partially offset by higher income tax payments, indicating a different trend in the quarter alone.
Monitor the trend in capital expenditure, as it increased relative to both the prior quarter and the year-ago quarter, contributing to the decline in free cash flow.