Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow margin weakened this quarter compared to both the prior quarter and the same quarter a year ago. Operating cash flow declined while capital expenditure increased, contributing to the lower free cash flow.
- Revenue was slightly higher than the prior quarter, yet operating cash flow was lower, which drove a decrease in free cash flow and a narrower free cash flow margin.
- Compared to the prior quarter, free cash flow margin declined; compared to the same quarter a year ago, both operating cash flow and free cash flow were lower and the margin weakened.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$608.2M
Trailing twelve-month free cash flow.
Quarter free cash flow
$121.9M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$143.8M
Cash generated by operations before capital spending.
CapEx
$21.9M
Capital spending and related asset purchases.
FCF margin
22.3%
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 |
|---|---|---|---|---|---|
| 2023-05-31 | $529.8M | $218.6M | $26.0M | $192.6M | 36.3% |
| 2023-08-31 | $535.8M | $155.7M | $635000 | $155.0M | 28.9% |
| 2023-11-30 | $542.2M | $155.1M | $16.5M | $138.7M | 25.6% |
| 2024-02-29 | $545.9M | $143.8M | $21.9M | $121.9M | 22.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 86.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 4.0% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$1.1B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Lower operating cash flow versus stable revenue
The strongest observable driver was the decline in operating cash flow, which fell from both the prior quarter and the year-ago quarter, while revenue was slightly higher than the prior quarter.
This led to a reduction in free cash flow and a lower free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was slightly higher than the prior quarter, yet operating cash flow was lower, which drove a decrease in free cash flow and a narrower free cash flow margin.
Compared to the prior quarter, free cash flow margin declined; compared to the same quarter a year ago, both operating cash flow and free cash flow were lower and the margin weakened.
Monitor the trajectory of operating cash flow, which declined relative to a modest increase in revenue.