Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Cash conversion weakened this quarter as operating cash flow and free cash flow declined significantly compared to both the prior quarter and the same quarter last year. Revenue was stable year-over-year but lower than the preceding quarter, resulting in a lower free cash flow margin.
- Revenue was similar to the same quarter a year ago but lower than the prior quarter. Operating cash flow dropped sharply, while capital expenditure was slightly lower, leading to a much lower free cash flow and a weakened free cash flow margin.
- Compared to the preceding quarter, revenue, operating cash flow, and free cash flow were all lower, with capital expenditure slightly lower, and the free cash flow margin weakened. Compared to the same quarter last year, revenue was similar, but operating cash flow and free cash flow were lower, and the margin weakened.
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
$224.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$317.2M
Cash generated by operations before capital spending.
CapEx
$93.2M
Capital spending and related asset purchases.
FCF margin
5.8%
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 |
|---|---|---|---|---|---|
| 2023-06-30 | $4.5B | $391.3M | $125.5M | $265.9M | 5.9% |
| 2023-09-30 | $4.5B | $649.5M | $145.5M | $504.0M | 11.1% |
| 2023-12-31 | $4.2B | $611.7M | $99.7M | $512.0M | 12.3% |
| 2024-03-31 | $3.9B | $317.2M | $93.2M | $224.0M | 5.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 86.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.4% | 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 Decline
Operating cash flow decreased substantially compared to both the prior quarter and the same quarter last year, while revenue remained relatively stable. This decline drove the reduction in free cash flow and margin.
The lower operating cash flow reduces the company's internal cash generation, which is key for funding working capital, capital expenditures, and debt service as noted in the filing.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was similar to the same quarter a year ago but lower than the prior quarter. Operating cash flow dropped sharply, while capital expenditure was slightly lower, leading to a much lower free cash flow and a weakened free cash flow margin.
Compared to the preceding quarter, revenue, operating cash flow, and free cash flow were all lower, with capital expenditure slightly lower, and the free cash flow margin weakened. Compared to the same quarter last year, revenue was similar, but operating cash flow and free cash flow were lower, and the margin weakened.
Monitor the trend in operating cash flow, as it is the primary driver of free cash flow and has declined notably relative to stable revenue.