Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
In the current quarter, the company's free cash flow margin was stable compared to the immediately preceding quarter but lower than the same quarter one year earlier. Revenue was higher sequentially but flat compared to the year-ago period, while operating cash flow increased sequentially yet decreased year-over-year.
- Cash conversion from revenue into operating cash flow improved sequentially as operating cash flow grew faster than revenue, leading to higher free cash flow despite a slight increase in capital expenditure. Compared to a year earlier, operating cash flow and free cash flow were both lower, and the free cash flow margin weakened.
- Relative to the prior quarter, revenue and operating cash flow were higher, and capital expenditure was broadly stable, resulting in improved free cash flow and an unchanged free cash flow margin. Compared to the same quarter last year, revenue was essentially flat, but operating cash flow, free cash flow, and the free cash flow margin were all lower, with capital expenditure moderately higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.4B
Trailing twelve-month free cash flow.
Quarter free cash flow
$388.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$481.0M
Cash generated by operations before capital spending.
CapEx
$93.0M
Capital spending and related asset purchases.
FCF margin
22.8%
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 |
|---|---|---|---|---|---|
| 2024-01-31 | $1.7B | $485.0M | $90.0M | $395.0M | 23.8% |
| 2024-04-30 | $1.6B | $333.0M | $103.0M | $230.0M | 14.6% |
| 2024-07-31 | $1.6B | $452.0M | $92.0M | $360.0M | 22.8% |
| 2024-10-31 | $1.7B | $481.0M | $93.0M | $388.0M | 22.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 110.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 5.5% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$2.0B | 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 trend
Operating cash flow increased sequentially but declined from the same quarter a year ago, while revenue was flat year-over-year. The SEC filing notes that management expects cash from operations to satisfy liquidity needs for working capital, capital expenditures, acquisitions, and share repurchases.
A sustained divergence between revenue and operating cash flow could signal changes in cash conversion efficiency.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Cash conversion from revenue into operating cash flow improved sequentially as operating cash flow grew faster than revenue, leading to higher free cash flow despite a slight increase in capital expenditure. Compared to a year earlier, operating cash flow and free cash flow were both lower, and the free cash flow margin weakened.
Relative to the prior quarter, revenue and operating cash flow were higher, and capital expenditure was broadly stable, resulting in improved free cash flow and an unchanged free cash flow margin. Compared to the same quarter last year, revenue was essentially flat, but operating cash flow, free cash flow, and the free cash flow margin were all lower, with capital expenditure moderately higher.
The year-over-year decline in operating cash flow, given stable revenue, is an item to monitor in upcoming quarters.