Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow margin was negative this quarter, though it improved markedly from the prior quarter. It remained weaker than the same quarter a year ago.
- Revenue grew from both the prior quarter and the year-ago quarter, but operating cash flow was significantly lower than both periods. Capital expenditure decreased from the prior quarter but increased year over year, resulting in negative free cash flow.
- Compared to the prior quarter, free cash flow margin improved on higher revenue and lower capital expenditure. Relative to the same quarter last year, the margin weakened due to lower operating cash flow and higher capital expenditure.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$132.6M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$14.7M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$58.1M
Cash generated by operations before capital spending.
CapEx
$72.8M
Capital spending and related asset purchases.
FCF margin
-2.2%
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 | $624.7M | $42.6M | $16.2M | $26.4M | 4.2% |
| 2023-12-31 | $640.1M | $149.0M | $56.2M | $92.8M | 14.5% |
| 2024-03-31 | $656.4M | $139.6M | $376.7M | -$237.1M | -36.1% |
| 2024-06-30 | $677.8M | $58.1M | $72.8M | -$14.7M | -2.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -76.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 10.7% | 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 dropped sharply from the prior quarter, driving the significant improvement in free cash flow margin. This reduction partially offsets the decline in operating cash flow.
The lower capital expenditure was the primary factor behind the improved free cash flow margin this quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue grew from both the prior quarter and the year-ago quarter, but operating cash flow was significantly lower than both periods. Capital expenditure decreased from the prior quarter but increased year over year, resulting in negative free cash flow.
Compared to the prior quarter, free cash flow margin improved on higher revenue and lower capital expenditure. Relative to the same quarter last year, the margin weakened due to lower operating cash flow and higher capital expenditure.
Monitor the level of capital expenditure, which remains elevated versus last year amid ongoing campus construction commitments.