Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Cash conversion improved sharply from the prior quarter, with free cash flow margin rising to a level similar to the same quarter last year. Operating cash flow was the primary driver of free cash flow, while capital expenditure remained a modest use of cash.
- Revenue increased compared to the prior quarter, and operating cash flow rose substantially, leading to a higher free cash flow and a stronger free cash flow margin. Capital expenditure was slightly higher than the prior quarter but remained a small portion of operating cash flow.
- Compared to the prior quarter, revenue, operating cash flow, and free cash flow were all higher, and the free cash flow margin improved. Versus the same quarter one year earlier, revenue was higher, operating cash flow and free cash flow were slightly higher, and the free cash flow margin was stable.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.6B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.9B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.9B
Cash generated by operations before capital spending.
CapEx
$47.0M
Capital spending and related asset purchases.
FCF margin
43.5%
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 |
|---|---|---|---|---|---|
| 2024-03-31 | $3.6B | -$618.5M | $23.1M | -$641.6M | -17.7% |
| 2024-06-30 | $3.9B | -$141.7M | $39.2M | -$180.9M | -4.7% |
| 2024-09-30 | $3.9B | $568.7M | $31.3M | $537.4M | 13.8% |
| 2024-12-31 | $4.3B | $1.9B | $47.0M | $1.9B | 43.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 419.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.1% | 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 Strength
Operating cash flow was the strongest observable driver, rising substantially from the prior quarter and slightly from the year-ago quarter, directly lifting free cash flow and margin.
Higher operating cash flow enabled a free cash flow margin that matched the year-ago level despite a modest increase in capital expenditure.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased compared to the prior quarter, and operating cash flow rose substantially, leading to a higher free cash flow and a stronger free cash flow margin. Capital expenditure was slightly higher than the prior quarter but remained a small portion of operating cash flow.
Compared to the prior quarter, revenue, operating cash flow, and free cash flow were all higher, and the free cash flow margin improved. Versus the same quarter one year earlier, revenue was higher, operating cash flow and free cash flow were slightly higher, and the free cash flow margin was stable.
Monitor the trend in capital expenditure relative to operating cash flow, as it increased from both the prior quarter and the year-ago quarter.