Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned negative in the current quarter, as operating cash flow weakened and capital expenditure rose relative to both the prior quarter and the same quarter last year. Revenue was lower than the prior quarter but higher than a year ago.
- Cash conversion deteriorated notably, with operating cash flow as a share of revenue declining and capital expenditure increasing, resulting in a negative free cash flow margin.
- Compared to the prior quarter, free cash flow declined sharply due to lower operating cash flow and higher capital spending. Versus the same quarter last year, free cash flow also weakened, despite higher revenue.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$683.9M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$26.7M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$155.0M
Cash generated by operations before capital spending.
CapEx
$181.7M
Capital spending and related asset purchases.
FCF margin
-0.5%
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 | $5.8B | $318.3M | $115.7M | $202.6M | 3.5% |
| 2024-06-30 | $6.0B | $293.6M | $143.6M | $150.1M | 2.5% |
| 2024-09-30 | $6.0B | $484.3M | $126.3M | $358.0M | 6.0% |
| 2024-12-31 | $5.8B | $155.0M | $181.7M | -$26.7M | -0.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -20.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.1% | 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
Operating cash flow decreased compared to both the previous quarter and the same quarter last year. The filing attributes this to lower net income and higher inventory levels, the latter driven by acquisitions and product investment.
This reduction in operating cash flow was the primary factor that turned free cash flow negative during the quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Cash conversion deteriorated notably, with operating cash flow as a share of revenue declining and capital expenditure increasing, resulting in a negative free cash flow margin.
Compared to the prior quarter, free cash flow declined sharply due to lower operating cash flow and higher capital spending. Versus the same quarter last year, free cash flow also weakened, despite higher revenue.
Monitor the trend in operating cash flow, as it was the primary source of free cash flow and was negatively impacted by lower net income and higher inventory levels.