Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow and margin improved significantly in the current quarter compared to both the prior quarter and the same quarter a year ago. The increase was driven by a substantial rise in operating cash flow, while capital expenditure remained relatively stable.
- Operating cash flow as a percentage of revenue increased sharply, resulting in a higher free cash flow margin. Capital expenditure was nearly unchanged, so the improvement in cash conversion came entirely from stronger operating cash flow.
- Revenue and operating cash flow were higher than both the previous quarter and the year-ago quarter. Free cash flow and margin improved sequentially and year-over-year, while capital expenditure was slightly lower than the prior quarter but slightly higher than a year ago.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$467.5M
Trailing twelve-month free cash flow.
Quarter free cash flow
$171.5M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$199.2M
Cash generated by operations before capital spending.
CapEx
$27.7M
Capital spending and related asset purchases.
FCF margin
17.1%
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 | $817.7M | $148.4M | $20.5M | $127.9M | 15.6% |
| 2024-03-31 | $880.7M | $87.2M | $22.4M | $64.7M | 7.4% |
| 2024-06-30 | $990.4M | $131.4M | $28.0M | $103.4M | 10.4% |
| 2024-09-30 | $999.9M | $199.2M | $27.7M | $171.5M | 17.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 107.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.8% | 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 Improvement
Operating cash flow rose substantially compared to both the prior quarter and the year-ago quarter, while revenue growth was more moderate. This was the primary factor behind the higher free cash flow margin.
The stronger operating cash flow provided a greater base for free cash generation, leading to a notably higher margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a percentage of revenue increased sharply, resulting in a higher free cash flow margin. Capital expenditure was nearly unchanged, so the improvement in cash conversion came entirely from stronger operating cash flow.
Revenue and operating cash flow were higher than both the previous quarter and the year-ago quarter. Free cash flow and margin improved sequentially and year-over-year, while capital expenditure was slightly lower than the prior quarter but slightly higher than a year ago.
Capital expenditure levels, given their stability across recent quarters, should be monitored for any change that could affect free cash flow.