Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue increased compared to the prior quarter and the same quarter last year. Operating cash flow improved from the prior quarter but was lower than the year-ago quarter, resulting in free cash flow margin that strengthened from the prior quarter but weakened year over year.
- The cash conversion, measured by free cash flow margin, improved from the preceding quarter as operating cash flow increased relative to revenue, while capital expenditure remained modest. However, compared to the same quarter last year, the conversion rate was lower due to a significant decrease in operating cash flow despite higher revenue.
- Sequentially, revenue, operating cash flow, and free cash flow all increased, with free cash flow margin improving. Year over year, revenue was higher, but operating cash flow and free cash flow were substantially lower, leading to a weakened free cash flow margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.3B
Trailing twelve-month free cash flow.
Quarter free cash flow
$386.2M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$417.5M
Cash generated by operations before capital spending.
CapEx
$31.2M
Capital spending and related asset purchases.
FCF margin
8.4%
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 |
|---|---|---|---|---|---|
| 2023-09-30 | $4.0B | $457.8M | $22.5M | $435.3M | 10.9% |
| 2023-12-31 | $4.3B | $288.4M | $24.6M | $263.8M | 6.1% |
| 2024-03-31 | $3.9B | $239.8M | $24.1M | $215.7M | 5.5% |
| 2024-06-30 | $4.6B | $417.5M | $31.2M | $386.2M | 8.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 47.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.7% | 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 year over year
Operating cash flow in the current quarter was lower than the same quarter last year, despite higher revenue. This significantly narrowed the free cash flow margin from the prior year period.
If the reduction in operating cash flow persists, it may continue to pressure free cash flow generation relative to revenue.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
The cash conversion, measured by free cash flow margin, improved from the preceding quarter as operating cash flow increased relative to revenue, while capital expenditure remained modest. However, compared to the same quarter last year, the conversion rate was lower due to a significant decrease in operating cash flow despite higher revenue.
Sequentially, revenue, operating cash flow, and free cash flow all increased, with free cash flow margin improving. Year over year, revenue was higher, but operating cash flow and free cash flow were substantially lower, leading to a weakened free cash flow margin.
Monitor the trend in operating cash flow relative to revenue, as the year-over-year decline in cash generation narrowed the free cash flow margin despite higher revenue.