Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Operating cash flow was solid while capital expenditure dropped sharply, resulting in a much stronger free cash flow and a higher margin. Year-over-year revenue was lower, but the company converted a larger share into free cash.
- Revenue was lower than both the prior quarter and the same quarter last year, yet operating cash flow improved sequentially and was only modestly lower year over year. The steep reduction in capital expenditure relative to the prior year drove free cash flow higher and expanded the free cash flow margin.
- Sequentially, revenue declined while operating cash flow and free cash flow both improved, and the free cash flow margin strengthened. Compared with the year-ago quarter, revenue and operating cash flow were lower, but capital expenditure was sharply lower, lifting free cash flow and margin well above the prior-year level.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.2B
Trailing twelve-month free cash flow.
Quarter free cash flow
$422.4M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$579.7M
Cash generated by operations before capital spending.
CapEx
$157.3M
Capital spending and related asset purchases.
FCF margin
24.5%
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 |
|---|---|---|---|---|---|
| 2024-03-29 | $1.9B | $498.7M | $233.9M | $264.8M | 14.2% |
| 2024-06-28 | $1.7B | $362.2M | $141.1M | $221.1M | 12.7% |
| 2024-09-27 | $1.8B | $465.8M | $161.7M | $304.1M | 17.3% |
| 2024-12-31 | $1.7B | $579.7M | $157.3M | $422.4M | 24.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 111.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 9.1% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$654.6M | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Capital expenditure discipline
Capital expenditure was materially lower than the prior-year period, while operating cash flow remained relatively resilient. This combination allowed the company to generate substantially higher free cash flow and improve its free cash flow margin.
The company converted a larger proportion of revenue into free cash, strengthening its financial flexibility.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was lower than both the prior quarter and the same quarter last year, yet operating cash flow improved sequentially and was only modestly lower year over year. The steep reduction in capital expenditure relative to the prior year drove free cash flow higher and expanded the free cash flow margin.
Sequentially, revenue declined while operating cash flow and free cash flow both improved, and the free cash flow margin strengthened. Compared with the year-ago quarter, revenue and operating cash flow were lower, but capital expenditure was sharply lower, lifting free cash flow and margin well above the prior-year level.
Monitor the level of capital expenditure in upcoming quarters, as the sharp year-over-year reduction was a key driver of the free cash flow improvement.