Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Cash conversion weakened sharply this quarter compared to both the prior quarter and the same quarter last year. The decline was driven by a significant drop in operating cash flow, while revenue was stable relative to the prior quarter but lower year over year.
- Revenue was stable sequentially but lower than a year earlier. Operating cash flow decreased substantially, capital expenditure was lower, and free cash flow followed a similar pattern, resulting in a free cash flow margin that weakened markedly from both comparison periods.
- Compared to the prior quarter, revenue was stable while operating cash flow, free cash flow, and free cash flow margin were all much lower; capital expenditure also decreased. Versus the same quarter one year ago, all metrics were lower except that capital expenditure was also lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.5B
Trailing twelve-month free cash flow.
Quarter free cash flow
$22.8M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$43.6M
Cash generated by operations before capital spending.
CapEx
$20.8M
Capital spending and related asset purchases.
FCF margin
2.0%
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 | $1.8B | $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% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 29.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.8% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$6.1B | 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 dropped substantially from the prior quarter and from the same quarter last year, while capital expenditure also decreased. The filing context notes that customers continued to reduce inventory and the macroeconomic environment remained weak.
This decline in operating cash flow was the primary factor behind the sharp reduction in free cash flow and free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was stable sequentially but lower than a year earlier. Operating cash flow decreased substantially, capital expenditure was lower, and free cash flow followed a similar pattern, resulting in a free cash flow margin that weakened markedly from both comparison periods.
Compared to the prior quarter, revenue was stable while operating cash flow, free cash flow, and free cash flow margin were all much lower; capital expenditure also decreased. Versus the same quarter one year ago, all metrics were lower except that capital expenditure was also lower.
Monitor operating cash flow levels, as the filing context indicates customers continued to reduce inventory amid a weak macroeconomic environment.