Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was higher than both the prior quarter and the same quarter last year, but free cash flow was lower. The free cash flow margin weakened year over year, as operating cash flow did not keep pace with revenue growth.
- Free cash flow margin decreased from the prior year, as operating cash flow grew slower than revenue and capital expenditure was slightly lower. Compared to the immediately preceding quarter, the margin was significantly lower because that quarter had unusually low revenue.
- Compared to the prior quarter, revenue was significantly higher but operating cash flow was lower, resulting in a much lower free cash flow margin. Versus the same quarter last year, revenue was higher while operating cash flow and free cash flow were both lower, with the margin declining.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.8B
Trailing twelve-month free cash flow.
Quarter free cash flow
$384.1M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$529.6M
Cash generated by operations before capital spending.
CapEx
$145.4M
Capital spending and related asset purchases.
FCF margin
15.9%
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 | $2.5B | $565.0M | $168.8M | $396.1M | 16.2% |
| 2023-09-30 | $2.5B | $426.8M | $169.8M | $257.0M | 10.4% |
| 2023-12-31 | $159.2M | $958.5M | $157.3M | $801.2M | 503.3% |
| 2024-03-31 | $2.4B | $529.6M | $145.4M | $384.1M | 15.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 122.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 6.0% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$15.1B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Weakened cash conversion
Operating cash flow decreased compared to the prior year quarter even as revenue increased, while capital expenditure was slightly lower. This decline in operating cash flow drove the reduction in free cash flow and margin.
If operating cash flow does not improve relative to revenue, free cash flow may continue to be pressured.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Free cash flow margin decreased from the prior year, as operating cash flow grew slower than revenue and capital expenditure was slightly lower. Compared to the immediately preceding quarter, the margin was significantly lower because that quarter had unusually low revenue.
Compared to the prior quarter, revenue was significantly higher but operating cash flow was lower, resulting in a much lower free cash flow margin. Versus the same quarter last year, revenue was higher while operating cash flow and free cash flow were both lower, with the margin declining.
Monitor the trend of operating cash flow relative to revenue, as it is the primary determinant of free cash flow generation.