Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow margin weakened sequentially but improved year-over-year due to higher revenue and stronger operating cash flow. The sequential decline was driven by lower operating cash flow despite a slight increase in revenue.
- Revenue increased both sequentially and year-over-year, while operating cash flow declined sequentially but rose versus the prior year. The resulting free cash flow was higher than a year ago but lower than the preceding quarter, with margins following the same pattern.
- Compared to the immediately preceding quarter, revenue was higher but free cash flow and margin were both lower, primarily due to reduced operating cash flow. Year-over-year, revenue, operating cash flow, free cash flow, and margin all improved, with capital expenditure unchanged.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$871.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
$242.8M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$257.0M
Cash generated by operations before capital spending.
CapEx
$14.2M
Capital spending and related asset purchases.
FCF margin
18.5%
The share of revenue converted into free cash flow.
TTM FCF yield
1.9%
TTM FCF divided by market capitalization.
FCF reconciliation
Free cash flow is not a GAAP line item; it should be bridged from the cash flow statement.
| Operating cash flow | $257.0M | Cash generated by operations before capital spending. |
| Capital expenditures | $14.2M | Capital spending used to bridge CFO to FCF. |
| Free cash flow | $242.8M | Operating cash flow less capital spending. |
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 |
|---|---|---|---|---|---|
| 2022-06-30 | $2.0B | $840.4M | $121.9M | $718.5M | 36.6% |
| 2022-09-30 | $2.1B | $793.2M | $110.3M | $682.9M | 32.9% |
| 2022-12-31 | $2.2B | $1.3B | $141.3M | $1.1B | 52.4% |
| 2023-03-31 | $2.2B | $709.5M | $112.7M | $596.8M | 26.7% |
| 2023-06-30 | $2.3B | $993.2M | $111.1M | $882.1M | 38.5% |
| 2023-09-30 | $2.3B | $616.2M | $74.4M | $541.8M | 24.0% |
| 2023-12-31 | $1.8B | $853.3M | $59.5M | $793.8M | 45.0% |
| 2024-03-31 | $1.3B | $430.0M | $40.1M | $389.9M | 29.4% |
| 2024-06-30 | $1.2B | $377.1M | $72.9M | $304.2M | 24.5% |
| 2024-09-30 | $1.2B | $43.6M | $20.8M | $22.8M | 2.0% |
| 2024-12-31 | $1.0B | $271.5M | $18.1M | $253.4M | 24.7% |
| 2025-03-31 | $970.5M | $205.9M | $14.2M | $191.7M | 19.8% |
| 2025-06-30 | $1.1B | $275.6M | $17.9M | $257.7M | 24.0% |
| 2025-09-30 | $1.1B | $88.1M | $36.5M | $51.6M | 4.5% |
| 2025-12-31 | $1.2B | $341.4M | $22.5M | $318.9M | 26.9% |
| 2026-03-31 | $1.3B | $257.0M | $14.2M | $242.8M | 18.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 168.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.1% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$5.3B | 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 Variability
Operating cash flow declined sequentially despite higher revenue, marking a weakening in cash conversion efficiency. This was the strongest observable driver of the sequential drop in free cash flow and margin.
If operating cash flow does not recover in line with revenue, free cash flow and margin may remain under pressure.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased both sequentially and year-over-year, while operating cash flow declined sequentially but rose versus the prior year. The resulting free cash flow was higher than a year ago but lower than the preceding quarter, with margins following the same pattern.
Compared to the immediately preceding quarter, revenue was higher but free cash flow and margin were both lower, primarily due to reduced operating cash flow. Year-over-year, revenue, operating cash flow, free cash flow, and margin all improved, with capital expenditure unchanged.
Monitor operating cash flow trajectory after its sequential decline, as it is the primary driver of free cash flow variability.
Valuation context
A cash-flow page should show how much investors are paying for the cash stream, without turning into a full DCF.
| Market capitalization | $46.5B | Used as the denominator for FCF yield. |
| TTM FCF yield | 1.9% | TTM free cash flow divided by market capitalization. |
| EV / TTM FCF | 59.4x | A quick valuation bridge, not a full DCF. |
Peer context
Free cash flow quality is easier to read against related public companies.
Risks and tripwires
Observable signals that would weaken the free cash flow thesis.
| Risk | Tripwire | Why it matters |
|---|---|---|
| FCF margin compression | FCF margin falls for two consecutive quarters. | Cash conversion may be weakening before earnings show it. |
| Capital intensity rises | CapEx/revenue moves materially above the recent run rate. | More operating cash flow would be consumed before becoming FCF. |
| Working capital drag | Inventory or receivables grow faster than revenue. | Reported growth may not translate into cash. |