Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow improved from the previous quarter but weakened compared to the same quarter last year. Revenue and free cash flow margin were lower than the year-ago period.
- Operating cash flow was higher than the prior quarter and lower than a year earlier, while capital expenditure decreased year-over-year. The resulting free cash flow margin rose from the preceding quarter but fell compared to the same quarter last year.
- Compared with the immediately preceding quarter, revenue, operating cash flow, and free cash flow all increased. Versus the same quarter one year earlier, revenue, operating cash flow, free cash flow, and margin were all lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$8.7B
Trailing twelve-month free cash flow.
Quarter free cash flow
$3.0B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$3.1B
Cash generated by operations before capital spending.
CapEx
$124.1M
Capital spending and related asset purchases.
FCF margin
18.3%
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 |
|---|---|---|---|---|---|
| 2023-08-31 | $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% |
| 2024-05-31 | $16.5B | $3.1B | $124.1M | $3.0B | 18.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 156.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.8% | 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.
Sequential Revenue and Cash Generation
Revenue, operating cash flow, and free cash flow all improved from the prior quarter, pushing the free cash flow margin higher. This sequential strengthening was the strongest observable driver in the quarter.
It reversed the previous quarter's weaker cash conversion and lifted free cash flow margin above the prior quarter's level.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow was higher than the prior quarter and lower than a year earlier, while capital expenditure decreased year-over-year. The resulting free cash flow margin rose from the preceding quarter but fell compared to the same quarter last year.
Compared with the immediately preceding quarter, revenue, operating cash flow, and free cash flow all increased. Versus the same quarter one year earlier, revenue, operating cash flow, free cash flow, and margin were all lower.
The change in operating assets and liabilities that reduced year-to-date operating cash flows warrants continued monitoring.