Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
The quarter's free cash flow margin improved compared to both the prior quarter and the same quarter last year, driven by stable revenue and lower capital expenditure. Operating cash flow increased year-over-year but decreased sequentially, while free cash flow showed a mixed trend relative to the two comparable periods.
- Revenue was stable year-over-year and lower sequentially. Operating cash flow improved relative to the year-ago quarter but weakened from the prior quarter. Capital expenditure declined in both comparisons, supporting a higher free cash flow and an improved free cash flow margin compared to both the preceding quarter and the same quarter last year.
- Compared to the immediately preceding quarter, revenue was lower, operating cash flow was lower, capital expenditure was lower, free cash flow was lower, but free cash flow margin was higher. Compared to the same quarter one year earlier, revenue was stable, operating cash flow was higher, capital expenditure was lower, free cash flow was higher, and free cash flow margin was higher.
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
$314.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$363.0M
Cash generated by operations before capital spending.
CapEx
$49.0M
Capital spending and related asset purchases.
FCF margin
19.6%
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 | $1.7B | $329.0M | $60.0M | $269.0M | 15.9% |
| 2023-09-30 | $1.7B | $477.0M | $57.0M | $420.0M | 24.6% |
| 2023-12-31 | $2.0B | $448.0M | $106.0M | $342.0M | 16.8% |
| 2024-03-31 | $1.6B | $363.0M | $49.0M | $314.0M | 19.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 100.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.1% | 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.
Lower Capital Expenditure
Capital expenditure declined in both the sequential and year-over-year comparisons, which directly supported free cash flow despite a lower or stable revenue base. This was the strongest observable factor in the improvement of free cash flow and margin.
Reduced capital spending was the primary driver behind the higher free cash flow margin this quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was stable year-over-year and lower sequentially. Operating cash flow improved relative to the year-ago quarter but weakened from the prior quarter. Capital expenditure declined in both comparisons, supporting a higher free cash flow and an improved free cash flow margin compared to both the preceding quarter and the same quarter last year.
Compared to the immediately preceding quarter, revenue was lower, operating cash flow was lower, capital expenditure was lower, free cash flow was lower, but free cash flow margin was higher. Compared to the same quarter one year earlier, revenue was stable, operating cash flow was higher, capital expenditure was lower, free cash flow was higher, and free cash flow margin was higher.
Monitor the trend in operating cash flow relative to the prior quarter, as it weakened despite stable revenue.