Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
In the first quarter of fiscal 2024, the company's free cash flow margin weakened compared to both the prior quarter and the same quarter one year earlier. Revenue was stable sequentially but higher year over year, while operating cash flow decreased in both comparisons.
- Cash conversion weakened as operating cash flow and free cash flow both declined despite stable revenue sequentially and higher revenue year over year. Capital expenditure was lower than the prior quarter but slightly higher than a year ago.
- Compared to the immediately preceding quarter, operating cash flow, free cash flow, and free cash flow margin were all lower. Versus the same quarter one year earlier, revenue improved but operating cash flow, free cash flow, and margin were all lower.
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
$341.7M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$350.8M
Cash generated by operations before capital spending.
CapEx
$9.1M
Capital spending and related asset purchases.
FCF margin
24.1%
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 | $326.8M | $17.4M | $309.4M | 23.3% |
| 2023-09-30 | $1.4B | $286.9M | $10.8M | $276.1M | 19.9% |
| 2023-12-31 | $1.4B | $391.4M | $13.1M | $378.3M | 26.7% |
| 2024-03-31 | $1.4B | $350.8M | $9.1M | $341.7M | 24.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 134.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.6% | 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 decline
The most prominent driver was the drop in operating cash flow, which fell from both the prior quarter and the year-ago period, even as revenue was stable sequentially and higher year over year.
The lower operating cash flow directly reduced free cash flow and compressed the free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Cash conversion weakened as operating cash flow and free cash flow both declined despite stable revenue sequentially and higher revenue year over year. Capital expenditure was lower than the prior quarter but slightly higher than a year ago.
Compared to the immediately preceding quarter, operating cash flow, free cash flow, and free cash flow margin were all lower. Versus the same quarter one year earlier, revenue improved but operating cash flow, free cash flow, and margin were all lower.
Monitor the trajectory of operating cash flow, as it declined from both the prior quarter and the year-ago period while revenue remained stable.