Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue increased compared to both the prior quarter and the same quarter last year, but operating cash flow and free cash flow margin decreased sharply, indicating a significant decline in cash conversion efficiency.
- Despite higher revenue, operating cash flow fell substantially, causing free cash flow margin to drop from approximately one-third to about one-eighth of revenue. Capital expenditure also rose, further reducing free cash flow.
- Compared to the preceding quarter, operating cash flow and free cash flow weakened markedly; the same pattern holds versus the year-ago quarter. Revenue alone improved, but the cash generation metrics all deteriorated.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$4.1B
Trailing twelve-month free cash flow.
Quarter free cash flow
$553.6M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$741.9M
Cash generated by operations before capital spending.
CapEx
$188.3M
Capital spending and related asset purchases.
FCF margin
12.7%
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 |
|---|---|---|---|---|---|
| 2024-03-31 | $3.8B | $1.4B | $103.7M | $1.3B | 33.8% |
| 2024-06-30 | $3.9B | $862.4M | $100.7M | $761.7M | 19.7% |
| 2024-09-29 | $4.2B | $1.6B | $110.6M | $1.5B | 35.0% |
| 2024-12-29 | $4.4B | $741.9M | $188.3M | $553.6M | 12.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 46.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 4.3% | 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.
Operating Cash Flow Drop
The filing indicated that changes in operating assets and liabilities, particularly an increase in accounts receivable, consumed a large amount of cash. This more than offset revenue growth and led to the sharp free cash flow decline.
If this cash conversion pressure persists, it may constrain future capital allocation flexibility despite the revenue expansion.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Despite higher revenue, operating cash flow fell substantially, causing free cash flow margin to drop from approximately one-third to about one-eighth of revenue. Capital expenditure also rose, further reducing free cash flow.
Compared to the preceding quarter, operating cash flow and free cash flow weakened markedly; the same pattern holds versus the year-ago quarter. Revenue alone improved, but the cash generation metrics all deteriorated.
Monitor whether operating cash flow can recover, as the current level is well below recent historical performance despite higher revenue.