Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow and margin weakened significantly this quarter compared to both the prior quarter and the same quarter last year. Revenue was slightly higher, but operating cash flow declined substantially, driving the drop.
- The conversion from revenue to operating cash flow was lower than in the preceding quarter and the year-ago period. Capital expenditure remained stable, so the decline in free cash flow was driven entirely by the reduced operating cash flow.
- Compared to the prior quarter, free cash flow and margin dropped sharply, while revenue edged higher. Relative to the same quarter one year earlier, free cash flow and margin also weakened, even though revenue was higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$536.5M
Trailing twelve-month free cash flow.
Quarter free cash flow
$60.5M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$86.4M
Cash generated by operations before capital spending.
CapEx
$25.9M
Capital spending and related asset purchases.
FCF margin
10.6%
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 |
|---|---|---|---|---|---|
| 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% |
| 2024-11-30 | $568.7M | $86.4M | $25.9M | $60.5M | 10.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 40.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 4.5% | 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.
Operating Cash Flow Decline
Operating cash flow was substantially lower than both the prior quarter and the year-ago quarter, despite slightly higher revenue. This was the strongest observable driver of the weakened free cash flow.
The drop in operating cash flow directly reduced free cash flow and margins, indicating a weaker cash conversion efficiency this quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
The conversion from revenue to operating cash flow was lower than in the preceding quarter and the year-ago period. Capital expenditure remained stable, so the decline in free cash flow was driven entirely by the reduced operating cash flow.
Compared to the prior quarter, free cash flow and margin dropped sharply, while revenue edged higher. Relative to the same quarter one year earlier, free cash flow and margin also weakened, even though revenue was higher.
Monitor whether operating cash flow can recover to prior levels, as the current quarter's decline was the primary factor behind the weakened free cash flow.