Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow margin weakened sharply from the prior quarter but was slightly lower than the same quarter last year. Operating cash flow declined sequentially while capital expenditure increased, driving the reduction in free cash flow.
- Revenue was stable compared to the prior quarter, but operating cash flow fell significantly, resulting in a lower free cash flow margin. The conversion from revenue to free cash flow weakened versus both the preceding quarter and the year-ago quarter.
- Compared to the immediately preceding quarter, free cash flow and free cash flow margin were lower, driven by a decline in operating cash flow and a rise in capital expenditure. Versus the same quarter one year earlier, free cash flow was slightly lower and the margin was modestly weaker, as revenue was higher but operating cash flow was lower.
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
$248.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$295.0M
Cash generated by operations before capital spending.
CapEx
$47.0M
Capital spending and related asset purchases.
FCF margin
19.4%
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 |
|---|---|---|---|---|---|
| 2024-02-29 | $1.4B | $671.7M | $40.7M | $631.0M | 45.2% |
| 2024-05-31 | $1.3B | $221.7M | $41.3M | $180.4M | 14.4% |
| 2024-08-31 | $1.3B | $546.1M | $35.6M | $510.5M | 39.9% |
| 2024-11-30 | $1.3B | $295.0M | $47.0M | $248.0M | 19.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 60.0% | 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.
Operating Cash Flow Decline
Operating cash flow decreased substantially from the prior quarter, while revenue remained flat. This was the strongest observable driver of the lower free cash flow and margin.
The reduction in operating cash flow directly lowered free cash flow and compressed the free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was stable compared to the prior quarter, but operating cash flow fell significantly, resulting in a lower free cash flow margin. The conversion from revenue to free cash flow weakened versus both the preceding quarter and the year-ago quarter.
Compared to the immediately preceding quarter, free cash flow and free cash flow margin were lower, driven by a decline in operating cash flow and a rise in capital expenditure. Versus the same quarter one year earlier, free cash flow was slightly lower and the margin was modestly weaker, as revenue was higher but operating cash flow was lower.
Monitor the trajectory of operating cash flow, as its sequential decline was the primary factor behind the weakened free cash flow margin.