Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
In the first quarter of fiscal 2024, free cash flow was positive with a margin that improved from the prior quarter and was slightly higher than the same quarter last year. Revenue decreased compared to both periods, but operating cash flow increased sequentially, supporting free cash flow.
- Operating cash flow as a percentage of revenue was higher than the previous quarter, indicating improved cash conversion. Capital expenditure was higher than the prior quarter but lower than the year-ago period, resulting in free cash flow that was higher sequentially but lower year-over-year.
- Compared to the prior quarter, revenue was lower but operating cash flow and free cash flow were higher, leading to a higher margin. Compared to the same quarter last year, all metrics were lower except the free cash flow margin, which was slightly higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$290.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
$131.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$552.0M
Cash generated by operations before capital spending.
CapEx
$421.0M
Capital spending and related asset purchases.
FCF margin
12.1%
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 |
|---|---|---|---|---|---|
| 2023-06-30 | $1.9B | $515.0M | $530.0M | -$15.0M | -0.8% |
| 2023-09-30 | $1.5B | $506.0M | $423.0M | $83.0M | 5.5% |
| 2023-12-31 | $1.9B | $470.0M | $379.0M | $91.0M | 4.7% |
| 2024-03-31 | $1.1B | $552.0M | $421.0M | $131.0M | 12.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 503.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 38.9% | 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.
Improved Cash Conversion
Operating cash flow increased sequentially despite lower revenue, resulting in a higher cash conversion rate. This was the primary factor behind the improved free cash flow margin.
If sustained, a higher cash conversion rate could support free cash flow even if revenue remains under pressure.
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 was higher than the previous quarter, indicating improved cash conversion. Capital expenditure was higher than the prior quarter but lower than the year-ago period, resulting in free cash flow that was higher sequentially but lower year-over-year.
Compared to the prior quarter, revenue was lower but operating cash flow and free cash flow were higher, leading to a higher margin. Compared to the same quarter last year, all metrics were lower except the free cash flow margin, which was slightly higher.
Monitor the trend in capital expenditure relative to operating cash flow, as it impacts free cash flow generation.