Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was higher compared to both the prior quarter and the same quarter last year, yet free cash flow and free cash flow margin were lower. The decline in free cash flow was driven by a combination of lower operating cash flow and higher capital expenditure.
- Operating cash flow as a proportion of revenue weakened relative to both the prior quarter and the year-ago period, while capital expenditure increased. This led to a lower free cash flow margin.
- Compared to the prior quarter, revenue was higher but operating cash flow was lower, resulting in a lower free cash flow and margin. Versus the same quarter one year earlier, revenue was higher, yet operating cash flow was lower and capital expenditure was higher, causing free cash flow and margin to be lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$741.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
$143.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$254.0M
Cash generated by operations before capital spending.
CapEx
$111.0M
Capital spending and related asset purchases.
FCF margin
6.8%
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 |
|---|---|---|---|---|---|
| 2023-09-30 | $2.0B | -$55.0M | $124.0M | -$179.0M | -8.8% |
| 2023-12-31 | $2.1B | $360.0M | $30.0M | $330.0M | 15.5% |
| 2024-03-31 | $2.0B | $539.0M | $92.0M | $447.0M | 22.4% |
| 2024-06-30 | $2.1B | $254.0M | $111.0M | $143.0M | 6.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 286.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 5.3% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$230.0M | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Weakening Operating Cash Flow Conversion
Operating cash flow declined while revenue increased, indicating a lower cash conversion rate. This was the primary factor behind the drop in free cash flow.
Combined with higher capital expenditure, the reduced operating cash flow further pressured free cash flow.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a proportion of revenue weakened relative to both the prior quarter and the year-ago period, while capital expenditure increased. This led to a lower free cash flow margin.
Compared to the prior quarter, revenue was higher but operating cash flow was lower, resulting in a lower free cash flow and margin. Versus the same quarter one year earlier, revenue was higher, yet operating cash flow was lower and capital expenditure was higher, causing free cash flow and margin to be lower.
Monitor the trend of operating cash flow relative to revenue, as it declined sharply from the prior quarter.