Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue decreased significantly, yet free cash flow improved markedly due to a far lower capital expenditure and a weaker decline in operating cash flow. The free cash flow margin rose sharply as a result.
- Operating cash flow was materially higher than revenue, leading to an extremely high free cash flow margin. Capital expenditure was a small fraction of operating cash flow, allowing most of it to convert into free cash flow.
- Compared with the immediately preceding quarter, revenue was lower, operating cash flow and free cash flow also declined, while capital expenditure was stable and the margin weakened. Versus the same quarter one year earlier, revenue was substantially lower, but operating cash flow and free cash flow both improved sharply, capital expenditure dropped significantly, and the margin strengthened considerably.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.0B
Trailing twelve-month free cash flow.
Quarter free cash flow
$661.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$699.0M
Cash generated by operations before capital spending.
CapEx
$38.0M
Capital spending and related asset purchases.
FCF margin
1224.1%
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 |
|---|---|---|---|---|---|
| 2023-12-31 | $43.0M | $868.0M | $824.0M | $44.0M | 102.3% |
| 2024-03-31 | $46.0M | $599.0M | $47.0M | $552.0M | 1200.0% |
| 2024-06-30 | $43.0M | $768.0M | $39.0M | $729.0M | 1695.3% |
| 2024-09-30 | $54.0M | $699.0M | $38.0M | $661.0M | 1224.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 218.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 70.4% | 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.
Capital expenditure reduction
Capital expenditure fell to roughly a tenth of the year-ago level, while operating cash flow rose substantially year-over-year. This combination was the strongest observable driver of the large increase in free cash flow.
The sharp drop in capital expenditure allowed free cash flow to rise despite lower revenue.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow was materially higher than revenue, leading to an extremely high free cash flow margin. Capital expenditure was a small fraction of operating cash flow, allowing most of it to convert into free cash flow.
Compared with the immediately preceding quarter, revenue was lower, operating cash flow and free cash flow also declined, while capital expenditure was stable and the margin weakened. Versus the same quarter one year earlier, revenue was substantially lower, but operating cash flow and free cash flow both improved sharply, capital expenditure dropped significantly, and the margin strengthened considerably.
Monitor revenue trajectory, as it decreased both sequentially and year-over-year, while operating cash flow did not decline proportionally.