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 improved sequentially as operating cash flow rose while capital expenditure remained stable. Compared to the same quarter last year, free cash flow was lower due to a decline in operating cash flow.
- Revenue was lower than both the prior quarter and the year-ago quarter. Operating cash flow increased from the prior quarter but decreased from a year ago. Capital expenditure was relatively stable across periods. As a result, free cash flow and free cash flow margin improved sequentially but weakened year over year.
- Compared to the immediately preceding quarter, free cash flow margin improved, driven by higher operating cash flow. Compared to the same quarter one year earlier, free cash flow margin weakened as operating cash flow was lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$724.3M
Trailing twelve-month free cash flow.
Quarter free cash flow
$246.7M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$256.9M
Cash generated by operations before capital spending.
CapEx
$10.2M
Capital spending and related asset purchases.
FCF margin
11.2%
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 |
|---|---|---|---|---|---|
| 2023-06-30 | $2.2B | $158.4M | $10.5M | $148.0M | 6.6% |
| 2023-09-30 | $2.2B | $190.0M | $8.0M | $182.0M | 8.3% |
| 2023-12-31 | $2.3B | $158.4M | $10.7M | $147.6M | 6.5% |
| 2024-03-31 | $2.2B | $256.9M | $10.2M | $246.7M | 11.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 145.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.5% | 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 from the prior quarter while capital expenditure was nearly unchanged, resulting in a higher free cash flow margin. Revenue was slightly lower, so the cash conversion rate improved.
The increase in operating cash flow was the main contributor to the sequential free cash flow growth.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was lower than both the prior quarter and the year-ago quarter. Operating cash flow increased from the prior quarter but decreased from a year ago. Capital expenditure was relatively stable across periods. As a result, free cash flow and free cash flow margin improved sequentially but weakened year over year.
Compared to the immediately preceding quarter, free cash flow margin improved, driven by higher operating cash flow. Compared to the same quarter one year earlier, free cash flow margin weakened as operating cash flow was lower.
Monitor whether operating cash flow can sustain its sequential improvement given the year-over-year decline.