Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow improved sharply from the prior quarter as operating cash flow surged, but it weakened relative to the same quarter last year due to a significant rise in capital expenditure.
- Revenue was stable compared with the prior quarter and slightly higher year over year. Operating cash flow increased markedly from both the prior quarter and the year-ago quarter, while capital expenditure rose substantially, leading to free cash flow that was much higher than the prior quarter but lower than the year-ago quarter. The free cash flow margin improved notably from the prior quarter but was slightly lower than the year-ago quarter.
- Free cash flow in the current quarter was substantially higher than the prior quarter, driven by a strong increase in operating cash flow. However, compared with the same quarter one year earlier, free cash flow was slightly lower due to a significant rise in capital expenditure.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.7B
Trailing twelve-month free cash flow.
Quarter free cash flow
$608.5M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$830.4M
Cash generated by operations before capital spending.
CapEx
$221.9M
Capital spending and related asset purchases.
FCF margin
45.0%
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 | $1.3B | $515.1M | $76.8M | $438.3M | 33.9% |
| 2023-09-30 | $1.3B | $551.2M | $70.1M | $481.1M | 36.0% |
| 2023-12-31 | $1.4B | $191.7M | $26.9M | $164.8M | 11.6% |
| 2024-03-31 | $1.4B | $830.4M | $221.9M | $608.5M | 45.0% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 203.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 16.4% | 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 Strength
Operating cash flow improved substantially from both the prior quarter and the year-ago quarter, reflecting higher cash generation from operations. This was the primary factor behind the sequential improvement in free cash flow.
The strong operating cash flow supported a sharp sequential increase in free cash flow despite higher capital expenditure.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was stable compared with the prior quarter and slightly higher year over year. Operating cash flow increased markedly from both the prior quarter and the year-ago quarter, while capital expenditure rose substantially, leading to free cash flow that was much higher than the prior quarter but lower than the year-ago quarter. The free cash flow margin improved notably from the prior quarter but was slightly lower than the year-ago quarter.
Free cash flow in the current quarter was substantially higher than the prior quarter, driven by a strong increase in operating cash flow. However, compared with the same quarter one year earlier, free cash flow was slightly lower due to a significant rise in capital expenditure.
Monitor the trajectory of capital expenditure, which increased sharply this quarter and directly impacted free cash flow relative to the prior year.