Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue increased while operating cash flow decreased, leading to a lower free cash flow margin compared to the prior quarter. Compared to the same quarter last year, revenue, operating cash flow, and free cash flow all improved.
- Cash conversion weakened sequentially as operating cash flow declined despite higher revenue. Capital expenditure remained stable, so the decline in free cash flow margin was driven by lower operating cash flow conversion.
- Compared to the prior quarter, revenue was higher, operating cash flow was lower, capital expenditure was similar, and free cash flow and margin were lower. Compared to the same quarter one year earlier, all metrics were higher except capital expenditure which was lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.4B
Trailing twelve-month free cash flow.
Quarter free cash flow
$292.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$342.0M
Cash generated by operations before capital spending.
CapEx
$50.0M
Capital spending and related asset purchases.
FCF margin
16.6%
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 |
|---|---|---|---|---|---|
| 2023-09-30 | $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% |
| 2024-06-30 | $1.8B | $342.0M | $50.0M | $292.0M | 16.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 79.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.8% | 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.
Cash conversion efficiency
Operating cash flow declined while revenue grew, causing the free cash flow margin to weaken sequentially. This indicates that revenue growth did not translate into proportional cash generation.
If this trend continues, the company's ability to generate free cash flow from revenue may be challenged.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Cash conversion weakened sequentially as operating cash flow declined despite higher revenue. Capital expenditure remained stable, so the decline in free cash flow margin was driven by lower operating cash flow conversion.
Compared to the prior quarter, revenue was higher, operating cash flow was lower, capital expenditure was similar, and free cash flow and margin were lower. Compared to the same quarter one year earlier, all metrics were higher except capital expenditure which was lower.
Monitor the outstanding balance on the revolving credit facility, which was drawn upon as of the quarter end, as it may signal additional cash needs.