Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue increased from both the prior quarter and the year-ago period, but operating cash flow and free cash flow declined significantly, leading to a substantially lower free cash flow margin. The primary factor was a sharp reduction in the change in receivables, as more annual maintenance was collected in the preceding quarter.
- Revenue rose, yet operating cash flow fell sharply because the change in receivables turned much less favorable, while capital expenditure decreased. The resulting free cash flow and margin both weakened compared to the sequential quarter and the same quarter last year.
- Compared to the immediately preceding quarter, revenue was higher but operating cash flow, free cash flow, and margin were all lower, with capital expenditure also lower. Year over year, revenue was higher while operating cash flow, free cash flow, and margin were lower, and capital expenditure was higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$464.5M
Trailing twelve-month free cash flow.
Quarter free cash flow
$104.1M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$116.9M
Cash generated by operations before capital spending.
CapEx
$12.8M
Capital spending and related asset purchases.
FCF margin
17.3%
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 | $545.7M | $81.5M | $16.8M | $64.7M | 11.9% |
| 2024-03-31 | $538.6M | $97.6M | $9.9M | $87.7M | 16.3% |
| 2024-06-30 | $559.9M | $231.8M | $23.8M | $208.0M | 37.2% |
| 2024-09-30 | $601.0M | $116.9M | $12.8M | $104.1M | 17.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 87.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.1% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$96.8M | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Receivables Collection Timing
The filing explains that a higher-than-historical collection of annual maintenance in the prior quarter left less to collect in the current quarter, causing a significant decrease in the change in receivables and a drop in operating cash flow. This is a timing-related shift rather than a change in underlying business performance.
The timing effect weakened operating cash flow and free cash flow for the quarter, resulting in a lower free cash flow margin despite higher revenue.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue rose, yet operating cash flow fell sharply because the change in receivables turned much less favorable, while capital expenditure decreased. The resulting free cash flow and margin both weakened compared to the sequential quarter and the same quarter last year.
Compared to the immediately preceding quarter, revenue was higher but operating cash flow, free cash flow, and margin were all lower, with capital expenditure also lower. Year over year, revenue was higher while operating cash flow, free cash flow, and margin were lower, and capital expenditure was higher.
Monitor the timing of annual maintenance collections and the related change in receivables, as the filing notes a shift that reduced current-quarter cash from operations.