Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was lower compared to both the preceding quarter and the same quarter last year. Free cash flow turned negative from a positive position in the prior quarter and was more negative than the year-ago period, driven by a substantial increase in capital expenditure.
- Operating cash flow improved relative to the preceding quarter but was stable versus the year-ago quarter. However, capital expenditure rose significantly, causing free cash flow to weaken and the free cash flow margin to improve on a comparative basis, reflecting the impact of higher spending.
- Compared to the preceding quarter, operating cash flow was higher, capital expenditure was much higher, and free cash flow shifted from positive to negative. Compared to the same quarter last year, operating cash flow was stable, capital expenditure was higher, and free cash flow was more negative.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$952.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$263.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.3B
Cash generated by operations before capital spending.
CapEx
$1.5B
Capital spending and related asset purchases.
FCF margin
14.7%
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 | $842.0M | $1.1B | $1.1B | -$56.0M | -6.7% |
| 2023-12-31 | $3.7B | $1.4B | $519.0M | $895.0M | 24.0% |
| 2024-03-31 | $3.5B | $1.0B | $653.0M | $376.0M | 10.8% |
| 2024-06-30 | -$1.8B | $1.3B | $1.5B | -$263.0M | 14.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -41.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | -85.4% | 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.
Capital Expenditure Increase
Capital expenditure rose substantially from the prior quarter and was also higher than the year-ago period. This was the strongest observable factor affecting free cash flow, which turned negative despite an improvement in operating cash flow.
The elevated capital expenditure outpaced the increase in operating cash flow, leading to a larger free cash outflow compared to the prior quarter and the year-ago quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow improved relative to the preceding quarter but was stable versus the year-ago quarter. However, capital expenditure rose significantly, causing free cash flow to weaken and the free cash flow margin to improve on a comparative basis, reflecting the impact of higher spending.
Compared to the preceding quarter, operating cash flow was higher, capital expenditure was much higher, and free cash flow shifted from positive to negative. Compared to the same quarter last year, operating cash flow was stable, capital expenditure was higher, and free cash flow was more negative.
Monitor the level of capital expenditure, as its increase was the primary factor behind the negative free cash flow in the quarter.