Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
In the current quarter, free cash flow improved sequentially as capital expenditure declined, despite slightly lower operating cash flow. Compared with the prior-year quarter, both operating cash flow and free cash flow were lower, resulting in a weakened free cash flow margin.
- Revenue was stable relative to the prior quarter, while operating cash flow edged lower. The reduction in capital expenditure boosted free cash flow and slightly improved the free cash flow margin.
- Compared with the preceding quarter, free cash flow and its margin improved, aided by lower capital spending. Versus the same quarter one year earlier, free cash flow and margin weakened, as operating cash flow declined while revenue increased.
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
$321.9M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$336.9M
Cash generated by operations before capital spending.
CapEx
$15.0M
Capital spending and related asset purchases.
FCF margin
22.0%
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 |
|---|---|---|---|---|---|
| 2024-03-31 | $1.4B | $350.8M | $9.1M | $341.7M | 24.1% |
| 2024-06-30 | $1.4B | $374.1M | $17.6M | $356.5M | 24.8% |
| 2024-09-30 | $1.5B | $340.6M | $29.3M | $311.3M | 21.4% |
| 2024-12-31 | $1.5B | $336.9M | $15.0M | $321.9M | 22.0% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 126.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.0% | 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.
Capital Expenditure Variability
The sequential improvement in free cash flow was primarily driven by a reduction in capital expenditure. However, the year-over-year decline in free cash flow was driven by lower operating cash flow, partially offset by slightly higher capital spending.
Future free cash flow will depend on whether operating cash flow stabilizes or recovers, and whether capital expenditure remains relatively contained.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was stable relative to the prior quarter, while operating cash flow edged lower. The reduction in capital expenditure boosted free cash flow and slightly improved the free cash flow margin.
Compared with the preceding quarter, free cash flow and its margin improved, aided by lower capital spending. Versus the same quarter one year earlier, free cash flow and margin weakened, as operating cash flow declined while revenue increased.
Monitor the trajectory of operating cash flow, which declined both sequentially and year over year.