Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow margin improved sharply from the prior quarter but was slightly lower than the same quarter last year. Cash conversion strengthened sequentially as operating cash flow increased significantly.
- Revenue was stable compared to the year-ago quarter and slightly lower sequentially. Operating cash flow converted to free cash flow at a high rate, with capital expenditure remaining modest relative to cash flow.
- Compared to the prior quarter, operating cash flow and free cash flow both improved substantially, leading to a strengthened free cash flow margin. Versus the year-ago quarter, operating cash flow and free cash flow were lower, resulting in a slightly weakened margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$8.8B
Trailing twelve-month free cash flow.
Quarter free cash flow
$2.0B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$2.1B
Cash generated by operations before capital spending.
CapEx
$109.8M
Capital spending and related asset purchases.
FCF margin
12.6%
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 |
|---|---|---|---|---|---|
| 2023-05-31 | $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% |
| 2024-02-29 | $15.8B | $2.1B | $109.8M | $2.0B | 12.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 118.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.7% | 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.
Operating Cash Flow Recovery
Operating cash flow increased significantly from the prior quarter, driving free cash flow higher. This recovery was the primary factor behind the improvement in free cash flow margin.
The strong sequential operating cash flow enabled a free cash flow margin that was nearly in line with the year-ago period.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was stable compared to the year-ago quarter and slightly lower sequentially. Operating cash flow converted to free cash flow at a high rate, with capital expenditure remaining modest relative to cash flow.
Compared to the prior quarter, operating cash flow and free cash flow both improved substantially, leading to a strengthened free cash flow margin. Versus the year-ago quarter, operating cash flow and free cash flow were lower, resulting in a slightly weakened margin.
Monitor the trajectory of operating cash flow, as it declined from the prior year despite sequential improvement.