Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
This quarter's revenue increased compared to both the prior quarter and the same quarter last year, but operating cash flow decreased, resulting in lower free cash flow and a lower margin. The decline in cash conversion was driven by higher income tax payments and working capital movements, as noted in the filing.
- Revenue was higher, but operating cash flow was lower. Capital expenditure was similar to the prior quarter and the year-ago quarter. Consequently, free cash flow and free cash flow margin were lower, indicating weaker cash conversion.
- Compared to the immediately preceding quarter, revenue was higher, but operating cash flow, free cash flow, and margin were lower. The same pattern held when compared to the same quarter one year earlier.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.3B
Trailing twelve-month free cash flow.
Quarter free cash flow
$466.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$583.0M
Cash generated by operations before capital spending.
CapEx
$117.0M
Capital spending and related asset purchases.
FCF margin
15.7%
The share of revenue converted into free cash flow.
FCF reconciliation
Free cash flow is not a GAAP line item; it should be bridged from the cash flow statement.
| Operating cash flow | $583.0M | Cash generated by operations before capital spending. |
| Capital expenditures | $117.0M | Capital spending used to bridge CFO to FCF. |
| Free cash flow | $466.0M | Operating cash flow less capital spending. |
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 |
|---|---|---|---|---|---|
| 2022-06-30 | $2.4B | $228.0M | $111.0M | $117.0M | 4.8% |
| 2022-09-30 | $2.4B | $729.0M | $102.0M | $627.0M | 26.3% |
| 2022-12-31 | $2.5B | $684.0M | $153.0M | $531.0M | 21.2% |
| 2023-03-31 | $2.5B | $841.0M | $132.0M | $709.0M | 28.2% |
| 2023-06-30 | $2.5B | $601.0M | $113.0M | $488.0M | 19.2% |
| 2023-09-30 | $2.5B | $862.0M | $85.0M | $777.0M | 31.1% |
| 2023-12-31 | $2.6B | $122.0M | $126.0M | -$4.0M | -0.2% |
| 2024-03-31 | $2.6B | $615.0M | $143.0M | $472.0M | 18.5% |
| 2024-06-30 | $2.6B | $367.0M | $89.0M | $278.0M | 10.8% |
| 2024-09-30 | $2.6B | $755.0M | $109.0M | $646.0M | 25.1% |
| 2024-12-31 | $2.6B | $677.0M | $117.0M | $560.0M | 21.7% |
| 2025-03-31 | $2.6B | $755.0M | $111.0M | $644.0M | 24.9% |
| 2025-12-31 | $3.0B | $583.0M | $117.0M | $466.0M | 15.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 88.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.9% | 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.
Operating Cash Flow Weakness
Revenue growth was offset by higher income tax payments and other working capital movements, as stated in the filing.
This weakened free cash flow despite higher revenue.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher, but operating cash flow was lower. Capital expenditure was similar to the prior quarter and the year-ago quarter. Consequently, free cash flow and free cash flow margin were lower, indicating weaker cash conversion.
Compared to the immediately preceding quarter, revenue was higher, but operating cash flow, free cash flow, and margin were lower. The same pattern held when compared to the same quarter one year earlier.
Monitor income tax payments, as the annual filing indicates they were a significant factor in the decline of operating cash flow.
Risks and tripwires
Observable signals that would weaken the free cash flow thesis.
| Risk | Tripwire | Why it matters |
|---|---|---|
| FCF margin compression | FCF margin falls for two consecutive quarters. | Cash conversion may be weakening before earnings show it. |
| Capital intensity rises | CapEx/revenue moves materially above the recent run rate. | More operating cash flow would be consumed before becoming FCF. |
| Working capital drag | Inventory or receivables grow faster than revenue. | Reported growth may not translate into cash. |