Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
The company generated positive free cash flow in the quarter, a significant improvement from the negative free cash flow a year earlier, though free cash flow was lower than the prior quarter. The free cash flow margin improved year-over-year but weakened sequentially.
- Revenue increased sequentially and year-over-year. Operating cash flow rose sharply compared to the same quarter last year, but fell from the previous quarter. Capital expenditure was higher than both prior periods. As a result, free cash flow turned positive year-over-year, while the margin expanded from negative to positive, but contracted from the prior quarter.
- Compared to the immediately preceding quarter, revenue was higher but operating cash flow and free cash flow were lower, leading to a lower free cash flow margin. Versus the same quarter one year earlier, all metrics improved: revenue, operating cash flow, capital expenditure, free cash flow, and the margin turned from negative to positive.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$818.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
$95.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$177.0M
Cash generated by operations before capital spending.
CapEx
$82.0M
Capital spending and related asset purchases.
FCF margin
5.2%
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 | $1.6B | $229.0M | $41.0M | $188.0M | 11.4% |
| 2023-09-30 | $1.7B | $191.0M | $59.0M | $132.0M | 8.0% |
| 2023-12-31 | $1.7B | $458.0M | $55.0M | $403.0M | 23.3% |
| 2024-03-31 | $1.8B | $177.0M | $82.0M | $95.0M | 5.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 39.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 4.5% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$3.2B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Year-over-Year Operating Cash Flow Improvement
The sharp increase in operating cash flow compared to the prior year was driven by higher operating results and favorable working capital changes, as noted in the filing. This drove free cash flow from negative to positive.
The improvement in operating cash flow was the primary factor in the positive free cash flow this quarter, contrasting with the prior year's negative free cash flow.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased sequentially and year-over-year. Operating cash flow rose sharply compared to the same quarter last year, but fell from the previous quarter. Capital expenditure was higher than both prior periods. As a result, free cash flow turned positive year-over-year, while the margin expanded from negative to positive, but contracted from the prior quarter.
Compared to the immediately preceding quarter, revenue was higher but operating cash flow and free cash flow were lower, leading to a lower free cash flow margin. Versus the same quarter one year earlier, all metrics improved: revenue, operating cash flow, capital expenditure, free cash flow, and the margin turned from negative to positive.
Monitor the trajectory of working capital changes, particularly accounts payable and accrued expenses, as they were a significant factor in the year-over-year operating cash flow improvement.