Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue and free cash flow were stable relative to the prior quarter, while free cash flow margin showed a slight improvement. Compared to the same quarter last year, free cash flow and margin were marginally lower despite similar operating cash flow.
- Operating cash flow exceeded capital expenditure, resulting in positive free cash flow. Free cash flow relative to revenue indicated the company retained a material portion of sales after necessary investments.
- Relative to the preceding quarter, revenue and operating cash flow were slightly lower, but free cash flow and free cash flow margin were slightly higher. Compared to the same quarter one year earlier, revenue was higher while operating cash flow remained similar, though free cash flow and free cash flow margin were slightly lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$8.6B
Trailing twelve-month free cash flow.
Quarter free cash flow
$3.2B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$3.4B
Cash generated by operations before capital spending.
CapEx
$213.6M
Capital spending and related asset purchases.
FCF margin
19.4%
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 |
|---|---|---|---|---|---|
| 2023-11-30 | $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% |
| 2024-08-31 | $16.4B | $3.4B | $213.6M | $3.2B | 19.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 188.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.3% | 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.
Stable Free Cash Flow Generation
Free cash flow margin improved slightly from the prior quarter despite a small decline in revenue. The strong operating cash flow base supported consistent free cash flow conversion.
This provided a solid cash basis from which to fund share repurchases as detailed in the filing.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow exceeded capital expenditure, resulting in positive free cash flow. Free cash flow relative to revenue indicated the company retained a material portion of sales after necessary investments.
Relative to the preceding quarter, revenue and operating cash flow were slightly lower, but free cash flow and free cash flow margin were slightly higher. Compared to the same quarter one year earlier, revenue was higher while operating cash flow remained similar, though free cash flow and free cash flow margin were slightly lower.
Monitor the level of capital expenditure, which was notably higher than the prior quarter and moderately above the year-ago quarter.