What does free cash flow margin mean?

How much real, spendable cash each sales dollar generates after reinvestment.

How do you interpret free cash flow margin?

A high and rising FCF margin is the hallmark of a cash-generative business. Persistent gaps between net margin and FCF margin warrant a look at working capital or capital intensity.

How does free cash flow margin compare across companies?

Strong cross-company quality signal; capital-light compounders post structurally higher FCF margins than asset-heavy peers.

Veeva Systems VEEV Free cash flow margin

Discontinued — last reported Q3 '21

Free cash flow margin at other companies

MicrosoftMSFT

22.9%-2.8pp

OracleORCL

-38.6%-49.0pp

IQVIAIQV

12.7%-1.2pp

RevvityRVTY

17%-1.9pp

Agilent TechnologiesA

15%-2.9pp

Thermo Fisher ScientificTMO

15.7%-2.1pp

Other financials

Income statement

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Revenue$882.9M+16.3%

Gross profit$662.0M+13.1%

Operating income$273.1M+16.8%

Net income$260.9M+14.4%

EPS (diluted)$1.57+14.6%

Balance sheet

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Cash & equivalents$1.9B-3.5%

Total debt$103.1M+33.5%

Total equity$7.3B+17.6%

Total assets$9.1B+17.6%

Cash flow

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Operating cash flow$1.1B+28.5%

CapEx$2.3M—

Free cash flow$110.6M—

Valuation

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Market cap$24.9B-31.2%

Enterprise value$23.11B-32.6%

P/E26.5×-19.9×

P/S7.5×-5.2×

Profitability

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Gross margin75%-0.5pp

Operating margin28.8%+1.8pp

Net margin28.4%+1.0pp

Returns & leverage

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Return on equity13.9%-0.1pp

Debt / equity0×0.0×

Current ratio4.7×+0.1×

Where this comes from

Calculated from Veeva Systems’s reported figures.

free cash flow/total revenue=37.2%

Based on trailing twelve months.

The official record: Veeva Systems’s 10-Q, filed December 3, 2021, on SEC EDGAR. View the filing →

Questions, answered.

What does free cash flow margin mean?: How much real, spendable cash each sales dollar generates after reinvestment.
How do you interpret free cash flow margin?: A high and rising FCF margin is the hallmark of a cash-generative business. Persistent gaps between net margin and FCF margin warrant a look at working capital or capital intensity.
How does free cash flow margin compare across companies?: Strong cross-company quality signal; capital-light compounders post structurally higher FCF margins than asset-heavy peers.