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 turned positive, a significant improvement from the negative levels in both the preceding quarter and the same quarter last year. This shift was driven by operating cash flow moving into positive territory, even as revenue declined.
- Revenue conversion into cash strengthened, as operating cash flow became positive while capital expenditure remained low, resulting in a positive free cash flow margin. This contrasts with the prior two periods where operating cash flow was negative.
- Compared to the prior quarter, revenue was lower but free cash flow improved markedly, with operating cash flow swinging from negative to positive. Versus the same quarter a year ago, revenue was also lower, yet free cash flow shifted from a deficit to a surplus.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$56.8M
Trailing twelve-month free cash flow.
Quarter free cash flow
$65.5M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$68.6M
Cash generated by operations before capital spending.
CapEx
$3.1M
Capital spending and related asset purchases.
FCF margin
8.2%
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 |
|---|---|---|---|---|---|
| 2023-10-28 | $1.1B | $19.1M | $8.0M | $11.1M | 1.0% |
| 2024-02-03 | $1.8B | -$11.0M | $7.7M | -$18.7M | -1.0% |
| 2024-05-04 | $881.8M | -$109.8M | $4.9M | -$114.7M | -13.0% |
| 2024-08-03 | $798.3M | $68.6M | $3.1M | $65.5M | 8.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 442.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.4% | Lower capital intensity usually supports FCF margin. |
| Net cash | $4.2B | 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 Turnaround
The strongest observable driver is the move of operating cash flow from negative in both the prior quarter and the year-ago quarter to positive in the current quarter. This reversal directly enabled positive free cash flow.
If operating cash flow remains positive, the company can continue generating free cash flow, representing a fundamental shift from prior periods.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue conversion into cash strengthened, as operating cash flow became positive while capital expenditure remained low, resulting in a positive free cash flow margin. This contrasts with the prior two periods where operating cash flow was negative.
Compared to the prior quarter, revenue was lower but free cash flow improved markedly, with operating cash flow swinging from negative to positive. Versus the same quarter a year ago, revenue was also lower, yet free cash flow shifted from a deficit to a surplus.
Monitor whether operating cash flow can sustain its positive trajectory in upcoming quarters, given the magnitude of the turnaround.