Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow weakened considerably this quarter despite steady revenue, as the cash conversion rate dropped sharply. Operating cash flow declined significantly from both the prior period and the same period one year earlier.
- Revenue remained similar to recent periods, but operating cash flow fell meaningfully, resulting in a much lower free cash flow and free cash flow margin. Capital expenditure was slightly lower, so the decline was driven primarily by the reduction in operating cash flow.
- Compared to the immediately preceding quarter, free cash flow margin weakened substantially, with operating cash flow more than halved. Versus the same quarter one year earlier, free cash flow also decreased, while revenue was essentially unchanged.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$461.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
$117.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$151.0M
Cash generated by operations before capital spending.
CapEx
$34.0M
Capital spending and related asset purchases.
FCF margin
3.7%
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 |
|---|---|---|---|---|---|
| 2023-12-30 | $3.0B | -$32.0M | $39.0M | -$71.0M | -2.4% |
| 2024-03-30 | $3.2B | $197.0M | $41.0M | $156.0M | 4.9% |
| 2024-06-29 | $3.1B | $296.0M | $37.0M | $259.0M | 8.3% |
| 2024-09-28 | $3.2B | $151.0M | $34.0M | $117.0M | 3.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 118.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.1% | 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 dropped sharply compared with both the prior quarter and the year-ago quarter, while revenue remained stable. The filing indicates that working capital requirements tend to increase from the third quarter, which aligns with the lower cash conversion observed.
If working capital continues to absorb cash, free cash flow could remain under pressure in coming periods.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue remained similar to recent periods, but operating cash flow fell meaningfully, resulting in a much lower free cash flow and free cash flow margin. Capital expenditure was slightly lower, so the decline was driven primarily by the reduction in operating cash flow.
Compared to the immediately preceding quarter, free cash flow margin weakened substantially, with operating cash flow more than halved. Versus the same quarter one year earlier, free cash flow also decreased, while revenue was essentially unchanged.
Monitor changes in working capital, as the filing notes that inventory buying opportunities and payment terms typically cause working capital needs to rise from the third quarter through the following first quarter.