Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow weakened both sequentially and versus the prior-year quarter, despite revenue growth. The decline was driven by lower operating cash flow relative to the preceding quarter and higher capital expenditure compared with the same quarter last year.
- Operating cash flow fell from the prior quarter while capital expenditure rose, causing free cash flow and its margin to contract. The cash conversion efficiency was lower sequentially, though revenue increased modestly.
- Compared with the immediately preceding quarter, free cash flow and free cash flow margin were lower. Versus the same quarter one year earlier, free cash flow decreased while revenue increased, and the margin narrowed.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$614.7M
Trailing twelve-month free cash flow.
Quarter free cash flow
$137.2M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$163.2M
Cash generated by operations before capital spending.
CapEx
$26.0M
Capital spending and related asset purchases.
FCF margin
24.4%
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 |
|---|---|---|---|---|---|
| 2023-11-30 | $542.2M | $155.1M | $16.5M | $138.7M | 25.6% |
| 2024-02-29 | $545.9M | $143.8M | $21.9M | $121.9M | 22.3% |
| 2024-05-31 | $552.7M | $238.2M | $21.3M | $216.9M | 39.2% |
| 2024-08-31 | $562.2M | $163.2M | $26.0M | $137.2M | 24.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 153.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 4.6% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$943.0M | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Capital Expenditure Increase
Capital expenditure was substantially higher than in the same quarter last year, contributing to the decline in free cash flow despite higher revenue. This investment outlay outpaced the growth in operating cash flow.
The elevated capital outlay reduced free cash flow margin relative to the prior-year period.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow fell from the prior quarter while capital expenditure rose, causing free cash flow and its margin to contract. The cash conversion efficiency was lower sequentially, though revenue increased modestly.
Compared with the immediately preceding quarter, free cash flow and free cash flow margin were lower. Versus the same quarter one year earlier, free cash flow decreased while revenue increased, and the margin narrowed.
Monitor the trajectory of capital expenditure, as its year-over-year increase was a key factor compressing free cash flow.