Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow for the quarter ended March 31, 2024 was stable compared to the same quarter last year, while the free cash flow margin weakened. Operating cash flow improved sequentially, driving a higher free cash flow margin versus the prior quarter.
- Revenue was higher than both the prior quarter and the year-ago quarter. Operating cash flow increased sequentially but was slightly lower year over year. Capital expenditure decreased compared to both periods, contributing to a free cash flow that was higher than the prior quarter but essentially unchanged from a year ago. The free cash flow margin improved sequentially but declined from the year-ago level.
- Compared to the prior quarter, free cash flow and margin improved, driven by higher operating cash flow and lower capital expenditure. Versus the same quarter last year, free cash flow was nearly unchanged, while the margin weakened due to a slight decline in operating cash flow relative to higher revenue.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$808.2M
Trailing twelve-month free cash flow.
Quarter free cash flow
$253.5M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$257.3M
Cash generated by operations before capital spending.
CapEx
$3.8M
Capital spending and related asset purchases.
FCF margin
66.0%
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 |
|---|---|---|---|---|---|
| 2023-06-30 | $372.0M | $145.3M | $6.5M | $138.8M | 37.3% |
| 2023-09-30 | $376.3M | $245.3M | $28.6M | $216.7M | 57.6% |
| 2023-12-31 | $380.4M | $204.2M | $5.0M | $199.2M | 52.4% |
| 2024-03-31 | $384.3M | $257.3M | $3.8M | $253.5M | 66.0% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 130.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.0% | 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.
Sequential Operating Cash Flow Improvement
Operating cash flow increased from the prior quarter, which was the strongest observable driver of the sequential improvement in free cash flow and margin.
This driver directly supported a higher free cash flow and margin compared to the prior quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher than both the prior quarter and the year-ago quarter. Operating cash flow increased sequentially but was slightly lower year over year. Capital expenditure decreased compared to both periods, contributing to a free cash flow that was higher than the prior quarter but essentially unchanged from a year ago. The free cash flow margin improved sequentially but declined from the year-ago level.
Compared to the prior quarter, free cash flow and margin improved, driven by higher operating cash flow and lower capital expenditure. Versus the same quarter last year, free cash flow was nearly unchanged, while the margin weakened due to a slight decline in operating cash flow relative to higher revenue.
Monitor the trend in operating cash flow relative to revenue, as it declined year over year despite higher revenue.