Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow improved sequentially, driven by higher operating cash flow and stable capital expenditure, but declined compared to the same quarter one year earlier. The free cash flow margin was slightly lower than the prior quarter and notably weaker than the year-ago period.
- Revenue increased from the previous quarter, and operating cash flow rose at a similar pace, while capital expenditure remained nearly unchanged, resulting in higher free cash flow. However, compared to the year-ago quarter, revenue was lower, operating cash flow decreased more sharply, and capital expenditure was slightly lower, leading to a decline in free cash flow and margin.
- Compared to the immediately preceding quarter, free cash flow was higher, driven by improved operating cash flow with minimal change in capital expenditure. Versus the same quarter one year earlier, free cash flow was lower, and the margin weakened significantly.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.8B
Trailing twelve-month free cash flow.
Quarter free cash flow
$593.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$779.0M
Cash generated by operations before capital spending.
CapEx
$186.0M
Capital spending and related asset purchases.
FCF margin
18.2%
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 | $3.4B | $1.1B | $175.0M | $962.0M | 28.1% |
| 2024-03-31 | $3.1B | $851.0M | $226.0M | $625.0M | 20.0% |
| 2024-06-30 | $3.1B | $761.0M | $185.0M | $576.0M | 18.4% |
| 2024-09-29 | $3.3B | $779.0M | $186.0M | $593.0M | 18.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 82.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 5.7% | 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.
Operating Cash Flow Performance
Operating cash flow increased sequentially, supporting higher free cash flow, but decreased from the year-ago quarter. The year-over-year decline was more pronounced than the revenue drop, indicating a weaker cash conversion rate.
The sequential improvement in operating cash flow was the primary factor behind the free cash flow increase, but the year-over-year decline has yet to reverse.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased from the previous quarter, and operating cash flow rose at a similar pace, while capital expenditure remained nearly unchanged, resulting in higher free cash flow. However, compared to the year-ago quarter, revenue was lower, operating cash flow decreased more sharply, and capital expenditure was slightly lower, leading to a decline in free cash flow and margin.
Compared to the immediately preceding quarter, free cash flow was higher, driven by improved operating cash flow with minimal change in capital expenditure. Versus the same quarter one year earlier, free cash flow was lower, and the margin weakened significantly.
Monitor the trend in operating cash flow relative to revenue, as the year-over-year decline in operating cash flow outpaced the revenue decline.