Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Vertex's free cash flow margin improved markedly in the current quarter, driven by a substantial increase in operating cash flow. Revenue was higher than both the prior quarter and the same quarter last year, while capital expenditure remained modest.
- Revenue increased, and operating cash flow grew at a faster pace, resulting in a higher free cash flow margin. Capital expenditure was slightly higher but remained a small portion of operating cash flow.
- Compared to the prior quarter, operating cash flow and free cash flow were significantly higher, and the margin improved. Versus the same quarter last year, all metrics were higher, with the margin also improving.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$3.7B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.2B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.3B
Cash generated by operations before capital spending.
CapEx
$68.4M
Capital spending and related asset purchases.
FCF margin
46.0%
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 | $2.5B | $1.1B | $59.6M | $1.1B | 43.1% |
| 2023-09-30 | $2.5B | $1.3B | $40.6M | $1.2B | 49.4% |
| 2023-12-31 | $2.5B | $234.6M | $58.1M | $176.5M | 7.0% |
| 2024-03-31 | $2.7B | $1.3B | $68.4M | $1.2B | 46.0% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 112.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.5% | 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 Strength
Operating cash flow was substantially higher than both the preceding quarter and the year-ago quarter, providing the primary lift to free cash flow.
This strength resulted in a free cash flow margin that was higher than both comparison periods.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased, and operating cash flow grew at a faster pace, resulting in a higher free cash flow margin. Capital expenditure was slightly higher but remained a small portion of operating cash flow.
Compared to the prior quarter, operating cash flow and free cash flow were significantly higher, and the margin improved. Versus the same quarter last year, all metrics were higher, with the margin also improving.
Monitor the company's net purchases of long-term marketable securities, which the filing indicated as a primary factor in the working capital decrease.