Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
The company's cash conversion strengthened this quarter, with free cash flow rising alongside an improvement in free cash flow margin. Revenue was lower than the preceding quarter but higher than the same quarter one year earlier.
- Operating cash flow was significantly higher than the prior quarter and also above the year-ago level, while capital expenditure increased moderately. The resulting free cash flow and free cash flow margin both improved compared to both the immediate prior quarter and the same quarter last year.
- Compared to the preceding quarter, free cash flow and free cash flow margin both improved notably despite a decline in revenue. Versus the same quarter one year earlier, revenue, operating cash flow, and free cash flow all increased and the margin widened.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$9.7B
Trailing twelve-month free cash flow.
Quarter free cash flow
$2.7B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$2.9B
Cash generated by operations before capital spending.
CapEx
$170.8M
Capital spending and related asset purchases.
FCF margin
16.1%
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 |
|---|---|---|---|---|---|
| 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% |
| 2024-11-30 | $17.7B | $1.0B | $152.2M | $870.3M | 4.9% |
| 2025-02-28 | $16.7B | $2.9B | $170.8M | $2.7B | 16.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 150.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.0% | 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 Strength
Operating cash flow increased substantially from both the prior quarter and the year-ago quarter, driving the improvement in free cash flow and free cash flow margin. Revenue was lower sequentially but meaningfully higher year over year.
The rise in operating cash flow was the strongest observable factor lifting free cash flow and margin this quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow was significantly higher than the prior quarter and also above the year-ago level, while capital expenditure increased moderately. The resulting free cash flow and free cash flow margin both improved compared to both the immediate prior quarter and the same quarter last year.
Compared to the preceding quarter, free cash flow and free cash flow margin both improved notably despite a decline in revenue. Versus the same quarter one year earlier, revenue, operating cash flow, and free cash flow all increased and the margin widened.
Monitor whether operating cash flow can sustain its higher level relative to revenue in coming quarters.