Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Cash conversion weakened this quarter as operating cash flow declined while revenue rose, leading to a lower free cash flow margin. Capital expenditure increased, further reducing free cash flow compared to both the prior quarter and the same quarter last year.
- Revenue was higher than the prior quarter and the year-ago quarter, but operating cash flow was lower, resulting in a free cash flow margin that weakened from both comparison periods. Capital expenditure increased from the prior quarter and the year-ago quarter, contributing to the decline in free cash flow.
- Compared to the immediately preceding quarter, revenue improved while operating cash flow, free cash flow, and free cash flow margin all weakened. Versus the same quarter one year earlier, revenue was higher but operating cash flow, free cash flow, and free cash flow margin were lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.5B
Trailing twelve-month free cash flow.
Quarter free cash flow
$255.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$297.0M
Cash generated by operations before capital spending.
CapEx
$42.0M
Capital spending and related asset purchases.
FCF margin
70.8%
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 |
|---|---|---|---|---|---|
| 2023-09-30 | $338.0M | $999.0M | $23.0M | $976.0M | 288.8% |
| 2023-12-31 | $353.0M | $898.0M | $60.0M | $838.0M | 237.4% |
| 2024-03-31 | $336.0M | $482.0M | $32.0M | $450.0M | 133.9% |
| 2024-06-30 | $360.0M | $297.0M | $42.0M | $255.0M | 70.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 53.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 11.7% | 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 was lower than both the prior quarter and the year-ago quarter, despite revenue being higher in both comparisons. This was the strongest observable driver of the weakened free cash flow and margin.
The decline in operating cash flow directly reduced free cash flow and compressed the free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher than the prior quarter and the year-ago quarter, but operating cash flow was lower, resulting in a free cash flow margin that weakened from both comparison periods. Capital expenditure increased from the prior quarter and the year-ago quarter, contributing to the decline in free cash flow.
Compared to the immediately preceding quarter, revenue improved while operating cash flow, free cash flow, and free cash flow margin all weakened. Versus the same quarter one year earlier, revenue was higher but operating cash flow, free cash flow, and free cash flow margin were lower.
Monitor the trend in operating cash flow relative to revenue, as it declined despite higher revenue in the current quarter.