Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
The current quarter's free cash flow margin improved compared to both the preceding quarter and the same quarter a year earlier, driven by a lower capital expenditure relative to operating cash flow. Free cash flow was higher year-over-year but slightly lower sequentially.
- Revenue in the current quarter was lower than the preceding quarter but higher than a year ago. Operating cash flow followed a similar pattern, while capital expenditure decreased both sequentially and year-over-year. As a result, free cash flow margin expanded compared to both periods.
- Compared to the preceding quarter, revenue and operating cash flow were lower, but capital expenditure was also lower, leading to a slightly lower free cash flow but a higher free cash flow margin. Compared to the same quarter a year earlier, all metrics improved significantly, with free cash flow margin showing notable expansion.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.4B
Trailing twelve-month free cash flow.
Quarter free cash flow
$402.1M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$435.3M
Cash generated by operations before capital spending.
CapEx
$33.2M
Capital spending and related asset purchases.
FCF margin
29.1%
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 |
|---|---|---|---|---|---|
| 2023-07-01 | $1.3B | $273.7M | $52.5M | $221.2M | 16.7% |
| 2023-09-30 | $1.3B | $357.4M | $45.5M | $311.9M | 24.4% |
| 2023-12-30 | $1.5B | $465.9M | $48.6M | $417.3M | 28.1% |
| 2024-03-30 | $1.4B | $435.3M | $33.2M | $402.1M | 29.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 145.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.4% | 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.
Lower Capital Spending
Capital expenditure in the current quarter was lower than both the preceding quarter and the same quarter a year earlier, which, combined with operating cash flow that was higher year-over-year, resulted in an improved free cash flow margin.
The reduced capital spending enhanced cash conversion efficiency, allowing a greater portion of operating cash flow to be retained as free cash flow.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue in the current quarter was lower than the preceding quarter but higher than a year ago. Operating cash flow followed a similar pattern, while capital expenditure decreased both sequentially and year-over-year. As a result, free cash flow margin expanded compared to both periods.
Compared to the preceding quarter, revenue and operating cash flow were lower, but capital expenditure was also lower, leading to a slightly lower free cash flow but a higher free cash flow margin. Compared to the same quarter a year earlier, all metrics improved significantly, with free cash flow margin showing notable expansion.
Monitor the trend in capital expenditure, as it decreased both sequentially and year-over-year, contributing to the improved free cash flow margin.