Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow decreased from the prior quarter but increased compared to the same quarter last year. The free cash flow margin weakened sequentially yet improved year-over-year, and the filing includes forward-looking statements and management's discussion.
- Operating cash flow as a proportion of revenue was lower than the previous quarter but higher than the year-ago period. Capital expenditure rose from the prior quarter, contributing to the sequential decline in free cash flow, while remaining slightly below the year-ago level.
- Compared to the immediately preceding quarter, revenue increased but operating cash flow decreased and capital expenditure increased, resulting in lower free cash flow and a weaker margin. Versus the same quarter one year earlier, revenue was lower while operating cash flow was stable and capital expenditure was slightly lower, leading to higher free cash flow and an improved margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.3B
Trailing twelve-month free cash flow.
Quarter free cash flow
$561.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.2B
Cash generated by operations before capital spending.
CapEx
$682.0M
Capital spending and related asset purchases.
FCF margin
18.5%
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 |
|---|---|---|---|---|---|
| 2023-12-31 | $3.0B | $1.8B | $2.5B | -$655.0M | -21.7% |
| 2024-03-31 | $3.3B | $1.2B | $544.0M | $690.0M | 20.7% |
| 2024-06-30 | $2.8B | $1.3B | $579.0M | $700.0M | 24.6% |
| 2024-09-30 | $3.0B | $1.2B | $682.0M | $561.0M | 18.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 79.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 22.5% | 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
Capital expenditure increased from the prior quarter, outpacing the change in operating cash flow and contributing to the decline in free cash flow.
Higher capital expenditure was a primary factor in the sequential weakening of free cash flow and margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a proportion of revenue was lower than the previous quarter but higher than the year-ago period. Capital expenditure rose from the prior quarter, contributing to the sequential decline in free cash flow, while remaining slightly below the year-ago level.
Compared to the immediately preceding quarter, revenue increased but operating cash flow decreased and capital expenditure increased, resulting in lower free cash flow and a weaker margin. Versus the same quarter one year earlier, revenue was lower while operating cash flow was stable and capital expenditure was slightly lower, leading to higher free cash flow and an improved margin.
Monitor the trend in capital expenditure relative to operating cash flow, as the sequential increase in spending reduced free cash flow.