Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
The company generated higher free cash flow compared to the prior quarter, though below the level of one year earlier. The free cash flow margin strengthened sequentially but remained lower than the same quarter last year.
- Operating cash flow increased from the previous quarter, driving the improvement in free cash flow. Capital expenditure remained modest relative to operating cash flow.
- Compared to the prior quarter, revenue and operating cash flow both rose. However, versus the year-ago quarter, operating cash flow was lower despite higher revenue.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$6.4B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.9B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.9B
Cash generated by operations before capital spending.
CapEx
$41.0M
Capital spending and related asset purchases.
FCF margin
35.8%
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 |
|---|---|---|---|---|---|
| 2023-09-01 | $4.9B | $1.9B | $91.0M | $1.8B | 36.4% |
| 2023-12-01 | $5.0B | $1.6B | $47.0M | $1.6B | 30.7% |
| 2024-03-01 | $5.2B | $1.2B | $37.0M | $1.1B | 21.9% |
| 2024-05-31 | $5.3B | $1.9B | $41.0M | $1.9B | 35.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 120.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.8% | Lower capital intensity usually supports FCF margin. |
| Net cash | $3.5B | 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 Improvement
Operating cash flow rose compared to the previous quarter, leading to a substantial increase in free cash flow. This improvement strengthened the free cash flow margin.
The higher operating cash flow directly boosted free cash flow and margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow increased from the previous quarter, driving the improvement in free cash flow. Capital expenditure remained modest relative to operating cash flow.
Compared to the prior quarter, revenue and operating cash flow both rose. However, versus the year-ago quarter, operating cash flow was lower despite higher revenue.
Monitor the trajectory of free cash flow margin, which declined on a year-over-year basis.