Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Cash conversion improved from the prior quarter and the year-ago quarter. The increase was driven by higher operating cash flow combined with a lower capital expenditure level.
- Revenue was lower than the previous quarter, but operating cash flow increased significantly, leading to a higher free cash flow and an improved free cash flow margin. Compared to the same quarter last year, revenue was roughly stable, while operating cash flow rose, capital expenditure fell, and both free cash flow and margin improved.
- Compared to the immediately preceding quarter, revenue was lower yet free cash flow more than covered that difference on a relative basis, reflecting higher cash conversion. Versus the same quarter one year earlier, free cash flow and margin were both higher, supported by stronger operating cash flow and slightly lower capital expenditure.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$807.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
$309.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$521.0M
Cash generated by operations before capital spending.
CapEx
$212.0M
Capital spending and related asset purchases.
FCF margin
12.1%
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 |
|---|---|---|---|---|---|
| 2023-12-31 | $1.7B | $492.0M | $305.0M | $187.0M | 10.9% |
| 2024-03-31 | $3.9B | $395.0M | $251.0M | $144.0M | 3.7% |
| 2024-06-30 | $5.4B | $365.0M | $198.0M | $167.0M | 3.1% |
| 2024-09-30 | $2.6B | $521.0M | $212.0M | $309.0M | 12.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 206.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 8.3% | 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.
Stronger Operating Cash Flow
Operating cash flow rose compared to both the prior quarter and the year-ago quarter, even though revenue was lower than the previous quarter. The filing notes that cash provided by operations for the first nine months was supported by working capital components and higher employee incentive compensation accruals, partially offset by timing of sales receipts.
The increase in operating cash flow was the primary factor lifting free cash flow and margin versus both comparison periods.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was lower than the previous quarter, but operating cash flow increased significantly, leading to a higher free cash flow and an improved free cash flow margin. Compared to the same quarter last year, revenue was roughly stable, while operating cash flow rose, capital expenditure fell, and both free cash flow and margin improved.
Compared to the immediately preceding quarter, revenue was lower yet free cash flow more than covered that difference on a relative basis, reflecting higher cash conversion. Versus the same quarter one year earlier, free cash flow and margin were both higher, supported by stronger operating cash flow and slightly lower capital expenditure.
Monitor the trend in capital expenditure relative to depreciation and amortization, as the full-year spending outlook is below the prior year's level.