Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow declined compared to both the prior quarter and the same quarter last year, primarily due to lower operating cash flow. The free cash flow margin also narrowed.
- Revenue was stable relative to the preceding quarter and slightly lower than a year ago. Operating cash flow, however, decreased substantially, resulting in a weaker conversion to free cash flow. The company notes a change in classification of certain payments from operating to investing activities beginning this year, which may affect comparability.
- Compared to the immediately preceding quarter, free cash flow was lower despite slightly higher revenue, as operating cash flow fell sharply. Versus the same quarter one year earlier, free cash flow was also lower on lower revenue and a decline in operating cash flow.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.0B
Trailing twelve-month free cash flow.
Quarter free cash flow
$320.3M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$379.1M
Cash generated by operations before capital spending.
CapEx
$58.8M
Capital spending and related asset purchases.
FCF margin
8.5%
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 |
|---|---|---|---|---|---|
| 2023-09-30 | $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% |
| 2024-06-30 | $3.8B | $379.1M | $58.8M | $320.3M | 8.5% |
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 | 1.6% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$16.2B | 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 Drop
The primary driver of lower free cash flow was a notable reduction in operating cash flow, even as revenue remained largely stable. Capital expenditures were slightly higher than the prior quarter but lower year-over-year.
The decline in operating cash flow directly impacted free cash flow and margin, indicating a weaker cash conversion efficiency this quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was stable relative to the preceding quarter and slightly lower than a year ago. Operating cash flow, however, decreased substantially, resulting in a weaker conversion to free cash flow. The company notes a change in classification of certain payments from operating to investing activities beginning this year, which may affect comparability.
Compared to the immediately preceding quarter, free cash flow was lower despite slightly higher revenue, as operating cash flow fell sharply. Versus the same quarter one year earlier, free cash flow was also lower on lower revenue and a decline in operating cash flow.
Monitor the trend in operating cash flow given its significant decline this quarter relative to both the prior and year-ago periods.