Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow margin weakened sharply from the prior quarter, driven by a lower operating cash flow and higher capital expenditure. Compared to the same quarter last year, revenue improved but free cash flow was slightly lower due to increased capital spending.
- Revenue declined from the prior quarter, while operating cash flow fell more sharply, resulting in a lower free cash flow margin. Capital expenditure increased relative to both the prior quarter and the year-ago quarter, further reducing free cash flow.
- Compared to the immediately preceding quarter, revenue and operating cash flow were lower, while capital expenditure was higher, causing free cash flow margin to weaken. Versus the same quarter one year earlier, revenue was higher, operating cash flow was higher, but capital expenditure was also higher, leading to a slightly lower free cash flow margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.5B
Trailing twelve-month free cash flow.
Quarter free cash flow
$178.7M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$434.1M
Cash generated by operations before capital spending.
CapEx
$255.4M
Capital spending and related asset purchases.
FCF margin
4.6%
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 |
|---|---|---|---|---|---|
| 2023-02-11 | $3.7B | $354.5M | $144.8M | $209.6M | 5.7% |
| 2023-05-06 | $4.1B | $724.7M | $171.2M | $553.5M | 13.5% |
| 2023-11-18 | $4.2B | $830.3M | $235.4M | $594.8M | 14.2% |
| 2024-02-10 | $3.9B | $434.1M | $255.4M | $178.7M | 4.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 34.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 6.6% | 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 Generation
Operating cash flow declined compared to the prior quarter, while revenue also declined, resulting in a lower free cash flow margin. The filing states that the company's primary liquidity source is cash flows from sales and that decreased demand would negatively impact cash generation.
The reduced free cash flow may constrain the company's ability to fund capital investments and share repurchases, as noted in the filing's liquidity discussion.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue declined from the prior quarter, while operating cash flow fell more sharply, resulting in a lower free cash flow margin. Capital expenditure increased relative to both the prior quarter and the year-ago quarter, further reducing free cash flow.
Compared to the immediately preceding quarter, revenue and operating cash flow were lower, while capital expenditure was higher, causing free cash flow margin to weaken. Versus the same quarter one year earlier, revenue was higher, operating cash flow was higher, but capital expenditure was also higher, leading to a slightly lower free cash flow margin.
Monitor the trajectory of operating cash flow relative to revenue, as the current quarter's conversion rate weakened significantly.