Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
This quarter's free cash flow margin was lower than the prior quarter but slightly higher than the same quarter last year. Operating cash flow decreased from the previous quarter, while revenue increased, leading to a lower conversion rate.
- The cash conversion ratio, measured by free cash flow margin, weakened sequentially as operating cash flow did not keep pace with revenue growth. Capital expenditure remained relatively stable.
- Compared to the immediately preceding quarter, revenue was higher but operating cash flow was lower, resulting in a lower free cash flow and margin. Compared to the same quarter one year earlier, revenue, operating cash flow, and free cash flow were all higher, with a slightly improved margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$862.8M
Trailing twelve-month free cash flow.
Quarter free cash flow
$153.9M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$211.7M
Cash generated by operations before capital spending.
CapEx
$57.8M
Capital spending and related asset purchases.
FCF margin
21.5%
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 |
|---|---|---|---|---|---|
| 2023-09-30 | $677.6M | $250.1M | $54.3M | $195.8M | 28.9% |
| 2023-12-31 | $677.2M | $252.4M | $56.3M | $196.1M | 29.0% |
| 2024-03-31 | $704.0M | $372.2M | $55.2M | $317.0M | 45.0% |
| 2024-06-30 | $716.8M | $211.7M | $57.8M | $153.9M | 21.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 50.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 8.1% | 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 Decline
Operating cash flow was lower than the previous quarter even though revenue was higher, causing a significant drop in free cash flow. This was the most notable change in the quarter's cash conversion.
The lower operating cash flow reduced the free cash flow margin to a level closer to the prior year's same quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
The cash conversion ratio, measured by free cash flow margin, weakened sequentially as operating cash flow did not keep pace with revenue growth. Capital expenditure remained relatively stable.
Compared to the immediately preceding quarter, revenue was higher but operating cash flow was lower, resulting in a lower free cash flow and margin. Compared to the same quarter one year earlier, revenue, operating cash flow, and free cash flow were all higher, with a slightly improved margin.
Monitor the trend of operating cash flow relative to revenue, as the sequential decline in cash conversion suggests a change in cash generation efficiency.