Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow was lower than the prior quarter and the same quarter last year, despite revenue being stable sequentially and higher year-over-year. The free cash flow margin weakened, reflecting a decline in operating cash flow that was only partially offset by reduced capital expenditure.
- Revenue was unchanged from the prior quarter and higher than a year earlier. Operating cash flow decreased compared to both periods, while capital expenditure also declined. The resulting free cash flow and margin were lower, indicating a weaker conversion of revenue into cash.
- Compared to the immediately preceding quarter, free cash flow and margin were lower, driven by a decline in operating cash flow that outweighed lower capital expenditure. Versus the same quarter one year earlier, the same pattern held: operating cash flow dropped while capital expenditure also fell, resulting in lower free cash flow and margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$461.5M
Trailing twelve-month free cash flow.
Quarter free cash flow
$198.6M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$235.4M
Cash generated by operations before capital spending.
CapEx
$36.8M
Capital spending and related asset purchases.
FCF margin
11.8%
The share of revenue converted into free cash flow.
TTM FCF yield
1.0%
TTM FCF divided by market capitalization.
FCF reconciliation
Free cash flow is not a GAAP line item; it should be bridged from the cash flow statement.
| Operating cash flow | $235.4M | Cash generated by operations before capital spending. |
| Capital expenditures | $36.8M | Capital spending used to bridge CFO to FCF. |
| Free cash flow | $198.6M | Operating cash flow less capital spending. |
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 |
|---|---|---|---|---|---|
| 2022-06-30 | $1.1B | $100.8M | $42.5M | $58.3M | 5.3% |
| 2022-09-30 | $1.4B | $54.6M | $56.9M | -$2.3M | -0.2% |
| 2022-12-31 | $1.4B | -$119.6M | $38.3M | -$157.9M | -11.2% |
| 2023-03-31 | $1.4B | -$34.7M | $66.5M | -$101.2M | -7.0% |
| 2023-06-30 | $1.3B | $5.0M | $31.5M | -$26.5M | -2.1% |
| 2023-09-30 | $1.3B | $64.8M | $28.4M | $36.4M | 2.8% |
| 2023-12-31 | $1.4B | -$77.0M | $35.6M | -$112.6M | -8.2% |
| 2024-03-31 | $1.4B | -$8.9M | $46.2M | -$55.1M | -3.9% |
| 2024-06-30 | $1.3B | -$191.0M | $35.1M | -$226.1M | -16.9% |
| 2024-09-30 | $1.4B | -$128.4M | $36.8M | -$165.2M | -12.2% |
| 2024-12-31 | $1.4B | -$4.8M | $43.4M | -$48.2M | -3.5% |
| 2025-03-31 | $1.6B | $279.0M | $54.1M | $224.9M | 14.2% |
| 2025-06-30 | $1.5B | -$44.7M | $25.1M | -$69.8M | -4.6% |
| 2025-09-30 | $1.8B | $128.4M | $31.9M | $96.5M | 5.4% |
| 2025-12-31 | $1.7B | $305.2M | $69.0M | $236.2M | 13.9% |
| 2026-03-31 | $1.7B | $235.4M | $36.8M | $198.6M | 11.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -333.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.2% | 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.
Decline in operating cash flow
Operating cash flow was lower than both the prior quarter and the year-ago quarter, while revenue remained stable or grew. This decline was the primary factor behind the weakened free cash flow and margin, despite a reduction in capital expenditure.
The lower operating cash flow reduced free cash flow even as capital spending decreased, compressing 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 unchanged from the prior quarter and higher than a year earlier. Operating cash flow decreased compared to both periods, while capital expenditure also declined. The resulting free cash flow and margin were lower, indicating a weaker conversion of revenue into cash.
Compared to the immediately preceding quarter, free cash flow and margin were lower, driven by a decline in operating cash flow that outweighed lower capital expenditure. Versus the same quarter one year earlier, the same pattern held: operating cash flow dropped while capital expenditure also fell, resulting in lower free cash flow and margin.
Monitor the company's debt repayment obligations and cash position, as it repaid senior notes during the period and has no borrowings under its credit agreement.
Valuation context
A cash-flow page should show how much investors are paying for the cash stream, without turning into a full DCF.
| Market capitalization | $45.3B | Used as the denominator for FCF yield. |
| TTM FCF yield | 1.0% | TTM free cash flow divided by market capitalization. |
| EV / TTM FCF | n/a | A quick valuation bridge, not a full DCF. |
Peer context
Free cash flow quality is easier to read against related public companies.
Risks and tripwires
Observable signals that would weaken the free cash flow thesis.
| Risk | Tripwire | Why it matters |
|---|---|---|
| FCF margin compression | FCF margin falls for two consecutive quarters. | Cash conversion may be weakening before earnings show it. |
| Capital intensity rises | CapEx/revenue moves materially above the recent run rate. | More operating cash flow would be consumed before becoming FCF. |
| Working capital drag | Inventory or receivables grow faster than revenue. | Reported growth may not translate into cash. |