Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow improved sequentially due to lower capital expenditure, but weakened sharply compared to the same quarter last year as operating cash flow declined. The free cash flow margin rose from the prior quarter yet fell from the year-ago level.
- Revenue was stable sequentially and year-over-year. Operating cash flow was higher than the prior quarter but lower than the year-ago quarter, resulting in a free cash flow margin that improved from the previous quarter and weakened from the same quarter last year.
- Compared to the prior quarter, free cash flow was higher and the margin improved, driven by lower capital expenditure. Compared to the same quarter one year earlier, free cash flow was lower and the margin weakened, primarily due to lower operating cash flow.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.2B
Trailing twelve-month free cash flow.
Quarter free cash flow
$564.8M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$614.6M
Cash generated by operations before capital spending.
CapEx
$49.8M
Capital spending and related asset purchases.
FCF margin
15.5%
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 |
|---|---|---|---|---|---|
| 2023-06-30 | $3.9B | $525.1M | $67.8M | $457.3M | 11.7% |
| 2023-09-30 | $3.9B | $835.2M | $95.9M | $739.3M | 18.8% |
| 2023-12-31 | $3.8B | $568.5M | $165.5M | $403.0M | 10.5% |
| 2024-03-31 | $3.7B | $614.6M | $49.8M | $564.8M | 15.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | n/a | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.4% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$16.9B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Lower Capital Expenditure
Capital expenditure in the current quarter was lower than both the prior quarter and the year-ago quarter, which supported free cash flow improvement sequentially.
The reduction in capital expenditure was the strongest observable driver of the sequential free cash flow increase.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was stable sequentially and year-over-year. Operating cash flow was higher than the prior quarter but lower than the year-ago quarter, resulting in a free cash flow margin that improved from the previous quarter and weakened from the same quarter last year.
Compared to the prior quarter, free cash flow was higher and the margin improved, driven by lower capital expenditure. Compared to the same quarter one year earlier, free cash flow was lower and the margin weakened, primarily due to lower operating cash flow.
Monitor the trend in operating cash flow, as it declined from the year-ago quarter despite stable revenue.