Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue increased modestly versus both the prior quarter and the year-ago quarter. Free cash flow was comparable to the prior year but significantly lower than the preceding quarter due to seasonally lower operating cash flow.
- Revenue rose slightly, while operating cash flow decreased sharply from the prior quarter but was stable year-over-year. Capital expenditure declined, resulting in free cash flow mirroring operating cash flow trends. The free cash flow margin contracted sequentially but remained consistent with the year-ago period.
- Sequentially, all cash flow metrics weakened substantially, with free cash flow falling from a high level in the prior quarter. Year-over-year, revenue, operating cash flow, and free cash flow each improved modestly, and the margin was stable.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$9.0B
Trailing twelve-month free cash flow.
Quarter free cash flow
$429.6M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$498.6M
Cash generated by operations before capital spending.
CapEx
$68.9M
Capital spending and related asset purchases.
FCF margin
2.6%
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 |
|---|---|---|---|---|---|
| 2023-02-28 | $15.8B | $2.3B | $107.5M | $2.2B | 14.1% |
| 2023-05-31 | $16.6B | $3.3B | $141.5M | $3.1B | 19.0% |
| 2023-08-31 | $16.0B | $3.4B | $180.3M | $3.2B | 20.2% |
| 2023-11-30 | $16.2B | $498.6M | $68.9M | $429.6M | 2.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 21.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.4% | 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.
Net income improvement
Per the filing, operating cash flow rose primarily due to higher net income, partly offset by changes in operating assets and liabilities.
This supported operating cash flow, helping it remain near the year-ago level despite seasonally lower sequential performance.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue rose slightly, while operating cash flow decreased sharply from the prior quarter but was stable year-over-year. Capital expenditure declined, resulting in free cash flow mirroring operating cash flow trends. The free cash flow margin contracted sequentially but remained consistent with the year-ago period.
Sequentially, all cash flow metrics weakened substantially, with free cash flow falling from a high level in the prior quarter. Year-over-year, revenue, operating cash flow, and free cash flow each improved modestly, and the margin was stable.
Monitor the increase in cash used for business acquisitions, as it contributed to higher investing outflows during the quarter.