Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow improved sequentially as operating cash flow rose and capital expenditure declined, though the margin remained below the year-ago level. Revenue increased compared with both the prior quarter and the same quarter last year.
- Operating cash flow as a share of revenue was higher than the prior quarter but lower than the year-ago quarter. Capital expenditure consumed a smaller portion of operating cash flow than in the preceding quarter, contributing to the sequential improvement in free cash flow margin.
- Compared with the immediately preceding quarter, free cash flow and free cash flow margin were higher, driven by stronger operating cash flow and lower capital expenditure. Versus the same quarter one year earlier, free cash flow and free cash flow margin were lower, as capital expenditure increased substantially while operating cash flow remained stable.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.1B
Trailing twelve-month free cash flow.
Quarter free cash flow
$647.3M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$847.1M
Cash generated by operations before capital spending.
CapEx
$199.8M
Capital spending and related asset purchases.
FCF margin
15.0%
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 |
|---|---|---|---|---|---|
| 2024-03-31 | $3.3B | $599.5M | $94.3M | $505.2M | 15.5% |
| 2024-06-30 | $3.6B | $664.1M | $141.3M | $522.8M | 14.5% |
| 2024-09-30 | $4.0B | $704.0M | $230.0M | $474.0M | 11.7% |
| 2024-12-31 | $4.3B | $847.1M | $199.8M | $647.3M | 15.0% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 86.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 4.6% | 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.
Operating Cash Flow Improvement
Operating cash flow increased sequentially, supporting a higher free cash flow despite a moderate rise in revenue. This was the strongest observable driver of the quarter's cash conversion performance.
The sequential rise in operating cash flow directly improved free cash flow and margin compared with the prior quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a share of revenue was higher than the prior quarter but lower than the year-ago quarter. Capital expenditure consumed a smaller portion of operating cash flow than in the preceding quarter, contributing to the sequential improvement in free cash flow margin.
Compared with the immediately preceding quarter, free cash flow and free cash flow margin were higher, driven by stronger operating cash flow and lower capital expenditure. Versus the same quarter one year earlier, free cash flow and free cash flow margin were lower, as capital expenditure increased substantially while operating cash flow remained stable.
Monitor the trend in capital expenditure relative to operating cash flow, as the year-over-year increase in capex was the primary factor behind the lower free cash flow margin.