Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow improved compared to both the immediately preceding quarter and the same quarter one year earlier, driven by an increase in revenue and operating cash flow. The free cash flow margin weakened relative to the prior year period due to a larger increase in revenue relative to free cash flow.
- Revenue increased substantially from the prior quarter and from the same quarter a year earlier, while operating cash flow rose at a slower pace. This resulted in a free cash flow margin that was lower than the prior quarter and further below the prior year period.
- Compared to the prior quarter, revenue, operating cash flow, and free cash flow were all higher, while the free cash flow margin was lower. Versus the same quarter a year ago, all absolute metrics were higher, but the free cash flow margin was materially lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.6B
Trailing twelve-month free cash flow.
Quarter free cash flow
$906.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$912.0M
Cash generated by operations before capital spending.
CapEx
$6.0M
Capital spending and related asset purchases.
FCF margin
27.3%
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 | $3.4B | $577.0M | $8.0M | $569.0M | 17.0% |
| 2024-03-31 | $2.9B | $353.0M | $7.0M | $346.0M | 11.8% |
| 2024-06-30 | $2.5B | $742.0M | $5.0M | $737.0M | 29.0% |
| 2024-09-30 | $3.3B | $912.0M | $6.0M | $906.0M | 27.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 110.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.2% | Lower capital intensity usually supports FCF margin. |
| Net cash | $962.0M | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Higher revenue driving cash generation
Revenue was higher than both the prior quarter and the year-ago quarter, which supported a higher absolute level of operating cash flow and free cash flow. This was the strongest observable contributor to the increase in free cash flow.
Higher revenue enabled the company to generate stronger operating and free cash flows in absolute terms.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased substantially from the prior quarter and from the same quarter a year earlier, while operating cash flow rose at a slower pace. This resulted in a free cash flow margin that was lower than the prior quarter and further below the prior year period.
Compared to the prior quarter, revenue, operating cash flow, and free cash flow were all higher, while the free cash flow margin was lower. Versus the same quarter a year ago, all absolute metrics were higher, but the free cash flow margin was materially lower.
Monitor the trend in the free cash flow margin, which has declined for two consecutive comparative periods despite rising revenue and operating cash flow.