Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow improved sharply from the preceding quarter, driven by a strong increase in operating cash flow. Compared to the same quarter a year earlier, free cash flow and margin were slightly lower, while revenue was higher.
- Revenue was higher than the prior quarter and the year-ago quarter. Operating cash flow, after deducting capital expenditure, resulted in free cash flow; the free cash flow margin improved sequentially but weakened year-over-year.
- Sequentially, all metrics improved: revenue, operating cash flow, and free cash flow were higher, and margin strengthened. Year-over-year, revenue was higher, but operating cash flow and free cash flow were slightly lower, and margin was slightly weaker.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$998.8M
Trailing twelve-month free cash flow.
Quarter free cash flow
$703.2M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$721.0M
Cash generated by operations before capital spending.
CapEx
$17.8M
Capital spending and related asset purchases.
FCF margin
36.2%
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 |
|---|---|---|---|---|---|
| 2023-09-30 | $1.4B | -$62.0M | $4.7M | -$66.7M | -4.7% |
| 2023-12-31 | $1.4B | $189.8M | $12.1M | $177.7M | 12.6% |
| 2024-03-31 | $1.7B | $207.4M | $22.8M | $184.6M | 10.7% |
| 2024-06-30 | $1.9B | $721.0M | $17.8M | $703.2M | 36.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 217.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.9% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$3.1B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Strong operating cash flow improvement
Operating cash flow increased significantly from the prior quarter, driving a large improvement in free cash flow. The sequential increase in free cash flow margin reflects this strong cash conversion.
The improvement in operating cash flow was the primary factor behind the quarter's free cash flow growth.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher than the prior quarter and the year-ago quarter. Operating cash flow, after deducting capital expenditure, resulted in free cash flow; the free cash flow margin improved sequentially but weakened year-over-year.
Sequentially, all metrics improved: revenue, operating cash flow, and free cash flow were higher, and margin strengthened. Year-over-year, revenue was higher, but operating cash flow and free cash flow were slightly lower, and margin was slightly weaker.
Monitor the trend in capital expenditure, which was lower sequentially but slightly higher than the prior year.