Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow was stable compared to a year ago, but free cash flow margin weakened as revenue growth outpaced cash generation. The quarter also saw a sequential decline in both free cash flow and margin.
- Revenue increased from both the prior quarter and the prior year, yet operating cash flow was unchanged year-over-year and lower sequentially. Lower capital expenditure partially offset the decline in operating cash flow, keeping free cash flow flat year-over-year but reducing the margin.
- Versus the immediately preceding quarter, free cash flow and margin both decreased. Compared to the same quarter one year earlier, free cash flow was stable while margin weakened.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$4.6B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.5B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.7B
Cash generated by operations before capital spending.
CapEx
$141.0M
Capital spending and related asset purchases.
FCF margin
40.6%
The share of revenue converted into free cash flow.
TTM FCF yield
4.3%
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 | $1.7B | Cash generated by operations before capital spending. |
| Capital expenditures | $141.0M | Capital spending used to bridge CFO to FCF. |
| Free cash flow | $1.5B | 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 | $1.8B | $433.0M | $151.0M | $282.0M | 16.1% |
| 2022-09-30 | $1.8B | $265.0M | $162.0M | $103.0M | 5.6% |
| 2022-12-31 | $1.9B | $1.2B | $144.0M | $1.0B | 52.5% |
| 2023-03-31 | $2.1B | $902.0M | $165.0M | $737.0M | 35.2% |
| 2023-06-30 | $2.1B | $580.0M | $132.0M | $448.0M | 20.8% |
| 2023-09-30 | $2.3B | $311.0M | $136.0M | $175.0M | 7.6% |
| 2023-12-31 | $2.4B | $1.6B | $261.0M | $1.3B | 55.1% |
| 2024-03-31 | $2.6B | $1.3B | $135.0M | $1.2B | 46.3% |
| 2024-06-30 | $2.6B | $620.0M | $262.0M | $358.0M | 13.6% |
| 2024-09-30 | $2.8B | $671.0M | $202.0M | $469.0M | 16.8% |
| 2024-12-31 | $3.0B | $1.6B | $253.0M | $1.4B | 46.7% |
| 2025-03-31 | $3.1B | $1.7B | $205.0M | $1.5B | 47.7% |
| 2025-06-30 | $3.2B | $716.0M | $190.0M | $526.0M | 16.4% |
| 2025-09-30 | $3.4B | $813.0M | $235.0M | $578.0M | 17.0% |
| 2025-12-31 | $3.6B | $2.2B | $238.0M | $2.0B | 56.1% |
| 2026-03-31 | $3.8B | $1.7B | $141.0M | $1.5B | 40.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 326.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.7% | 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.
Revenue growth without proportional operating cash flow increase
Although revenue rose, operating cash flow did not keep pace, resulting in a lower free cash flow margin. Filing context indicates subscription services are typically prepaid, which supports cash generation, but the current quarter showed a decoupling.
If operating cash flow does not align with revenue growth in future periods, free cash flow 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 from both the prior quarter and the prior year, yet operating cash flow was unchanged year-over-year and lower sequentially. Lower capital expenditure partially offset the decline in operating cash flow, keeping free cash flow flat year-over-year but reducing the margin.
Versus the immediately preceding quarter, free cash flow and margin both decreased. Compared to the same quarter one year earlier, free cash flow was stable while margin weakened.
Monitor the relationship between revenue growth and operating cash flow, as the current gap may signal a shift in cash conversion efficiency.
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 | $108.5B | Used as the denominator for FCF yield. |
| TTM FCF yield | 4.3% | TTM free cash flow divided by market capitalization. |
| EV / TTM FCF | n/a | 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. |