Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
For the quarter, revenue increased compared to both the prior quarter and the same quarter last year, but free cash flow and free cash flow margin decreased. The company's cash conversion weakened as operating cash flow did not keep pace with revenue growth.
- Revenue was higher, while operating cash flow was lower than the prior quarter and slightly lower than a year ago. Capital expenditure was slightly lower than the prior quarter but higher than a year ago, resulting in lower free cash flow and free cash flow margin compared to both periods.
- Compared to the preceding quarter, revenue increased but operating cash flow, free cash flow, and free cash flow margin all decreased. Compared to the same quarter a year earlier, revenue increased, operating cash flow was slightly lower, capital expenditure was higher, and free cash flow and margin were lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$3.4B
Trailing twelve-month free cash flow.
Quarter free cash flow
$872.9M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$892.7M
Cash generated by operations before capital spending.
CapEx
$19.8M
Capital spending and related asset purchases.
FCF margin
58.7%
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 | $1.4B | $650.4M | $20.5M | $629.9M | 46.3% |
| 2023-09-30 | $1.3B | $856.7M | $19.9M | $836.8M | 62.6% |
| 2023-12-31 | $1.4B | $1.0B | $20.8M | $1.0B | 71.1% |
| 2024-03-31 | $1.5B | $892.7M | $19.8M | $872.9M | 58.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 102.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.3% | 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.
Cash conversion efficiency
Despite higher revenue, operating cash flow decreased, leading to a lower free cash flow margin. The filing states that net cash provided by operating activities and used by investing activities remained consistent with the same period last year, which aligns with the slight year-over-year decrease in operating cash flow.
The weakened cash conversion may constrain future cash generation if the relationship between revenue and operating cash flow persists.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher, while operating cash flow was lower than the prior quarter and slightly lower than a year ago. Capital expenditure was slightly lower than the prior quarter but higher than a year ago, resulting in lower free cash flow and free cash flow margin compared to both periods.
Compared to the preceding quarter, revenue increased but operating cash flow, free cash flow, and free cash flow margin all decreased. Compared to the same quarter a year earlier, revenue increased, operating cash flow was slightly lower, capital expenditure was higher, and free cash flow and margin were lower.
Monitor the trend of operating cash flow relative to revenue, as the free cash flow margin declined in the current quarter.