Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow increased sequentially but declined year-over-year, while the free cash flow margin weakened in both comparisons due to a significant revenue rise that outpaced operating cash flow growth.
- Revenue was substantially higher than the prior quarter, yet operating cash flow increased to a lesser extent, resulting in a lower free cash flow margin. Capital expenditure rose slightly, partially offsetting the cash conversion.
- Compared to the prior quarter, free cash flow in absolute terms improved, but the margin weakened. Versus the same quarter a year earlier, both free cash flow and its margin were lower, even though revenue was higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.3B
Trailing twelve-month free cash flow.
Quarter free cash flow
$279.7M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$308.9M
Cash generated by operations before capital spending.
CapEx
$29.2M
Capital spending and related asset purchases.
FCF margin
13.4%
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 |
|---|---|---|---|---|---|
| 2023-09-29 | $1.5B | $411.4M | $27.9M | $383.5M | 25.7% |
| 2023-12-31 | -$567.7M | $446.8M | $4.9M | $441.9M | -77.8% |
| 2024-03-29 | $984.2M | $256.7M | $26.4M | $230.3M | 23.4% |
| 2024-06-28 | $2.1B | $308.9M | $29.2M | $279.7M | 13.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 143.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.4% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$3.1B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Revenue Growth with Margin Pressure
The strongest observable factor is the substantial rise in revenue, which lifted free cash flow sequentially. However, operating cash flow did not keep pace, and the margin contracted compared to both prior periods.
Sustainability of cash generation depends on whether operating cash flow can align more closely with revenue growth going forward.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was substantially higher than the prior quarter, yet operating cash flow increased to a lesser extent, resulting in a lower free cash flow margin. Capital expenditure rose slightly, partially offsetting the cash conversion.
Compared to the prior quarter, free cash flow in absolute terms improved, but the margin weakened. Versus the same quarter a year earlier, both free cash flow and its margin were lower, even though revenue was higher.
Monitor the free cash flow margin trajectory, as it compressed despite higher revenue, and any changes in capital expenditure levels.