Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow weakened sharply this quarter compared to both the prior quarter and the same quarter last year, driven by a significant decline in operating cash flow. Revenue also decreased, while capital expenditure was lower, but the drop in operating cash flow far outweighed the reduction in spending.
- Revenue was lower, and operating cash flow declined substantially, resulting in a much lower free cash flow and free cash flow margin. The conversion from revenue to cash was weaker than in the comparable periods.
- Compared to the immediately preceding quarter, revenue, operating cash flow, free cash flow, and free cash flow margin all decreased. Versus the same quarter one year earlier, all four metrics were also lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$890.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
$74.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$110.0M
Cash generated by operations before capital spending.
CapEx
$36.0M
Capital spending and related asset purchases.
FCF margin
6.1%
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 |
|---|---|---|---|---|---|
| 2023-07-31 | $1.4B | $241.0M | $45.0M | $196.0M | 14.2% |
| 2023-10-31 | $1.3B | $378.0M | $39.0M | $339.0M | 25.9% |
| 2024-01-31 | $1.3B | $328.0M | $47.0M | $281.0M | 22.3% |
| 2024-04-30 | $1.2B | $110.0M | $36.0M | $74.0M | 6.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 58.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.0% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$138.0M | 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 substantially lower than both the prior quarter and the year-ago quarter, driving the reduction in free cash flow. The filing notes that net cash provided by operating activities decreased for the six-month period compared to the same period last year, citing lower net income and other factors.
The lower 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 lower, and operating cash flow declined substantially, resulting in a much lower free cash flow and free cash flow margin. The conversion from revenue to cash was weaker than in the comparable periods.
Compared to the immediately preceding quarter, revenue, operating cash flow, free cash flow, and free cash flow margin all decreased. Versus the same quarter one year earlier, all four metrics were also lower.
Monitor operating cash flow, as its decline was the primary factor behind the weakened free cash flow this quarter.