Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow decreased from the prior quarter and was slightly lower than the same quarter last year, driven by a decline in operating cash flow. The free cash flow margin weakened sequentially but remained relatively stable year-over-year.
- Revenue increased compared to both the prior quarter and the year-ago quarter, while operating cash flow declined sequentially and was slightly lower year-over-year. Capital expenditure decreased from both comparison periods, resulting in free cash flow that was lower than the prior quarter but close to the year-ago level.
- Compared to the prior quarter, free cash flow and margin were lower, primarily due to a larger decline in operating cash flow relative to the reduction in capital expenditure. Versus the same quarter last year, free cash flow was slightly lower and margin was stable, as higher revenue was offset by a modest decrease in operating cash flow.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$3.0B
Trailing twelve-month free cash flow.
Quarter free cash flow
$555.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$681.0M
Cash generated by operations before capital spending.
CapEx
$126.0M
Capital spending and related asset purchases.
FCF margin
11.0%
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 | $4.8B | $722.0M | $184.0M | $538.0M | 11.2% |
| 2023-09-30 | $4.9B | $1.2B | $161.0M | $991.0M | 20.2% |
| 2023-12-31 | $5.0B | $1.1B | $197.0M | $939.0M | 19.0% |
| 2024-03-31 | $5.1B | $681.0M | $126.0M | $555.0M | 11.0% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 81.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.5% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$7.1B | 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 from both the prior quarter and the year-ago quarter, while revenue increased. The filing context attributes the year-over-year decline primarily to an increase in receivables, partially offset by higher net income.
This decline in operating cash flow was the primary factor behind the lower free cash flow compared to the prior quarter and the slight decrease versus the year-ago quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased compared to both the prior quarter and the year-ago quarter, while operating cash flow declined sequentially and was slightly lower year-over-year. Capital expenditure decreased from both comparison periods, resulting in free cash flow that was lower than the prior quarter but close to the year-ago level.
Compared to the prior quarter, free cash flow and margin were lower, primarily due to a larger decline in operating cash flow relative to the reduction in capital expenditure. Versus the same quarter last year, free cash flow was slightly lower and margin was stable, as higher revenue was offset by a modest decrease in operating cash flow.
Monitor the trend in operating cash flow, as it declined sequentially and year-over-year despite higher revenue.