“From my perspective, I just think it's prudent to think about free cash flow being slightly higher, by three, four, five percentage points higher than operating profitability.”

In context

“Remo Canessa (CFO): Yes. Let me first say we would like to be prudent with our projections. So, keep that in mind. If you take a look at our free cash flow margins in Q1, it was like in the 35% to 36% range of revenue. In fiscal Q2, our free cash flow margins were 12% with operating profitability at 9%. From my perspective, I just think it's prudent to think about free cash flow being slightly higher, by three, four, five percentage points higher than operating profitability. It is going to fluctuate on a quarter-on-quarter basis. Our Q1 to Q3 are typically our highest quarters for free cash flow. The reason for that is that our Q2 to Q4 is our biggest billing quarters. As we get bigger, we build typically annually. When we talk about billings, that is what we discuss. Certainly, we could increase free cash flow by doing multi-year billings, but that's not our model. What we try to do is get multi-year commitment contracts, which we have seen increase. But for free cash flow or billings, we typically state that on one year.”