Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow and revenue improved sequentially and year-over-year, while the free cash flow margin remained relatively stable.
- Revenue growth drove higher operating cash flow, and with capital expenditure remaining low relative to revenue, free cash flow increased. The free cash flow margin edged up from the prior quarter but was slightly below the year-ago level.
- Compared to the prior quarter, revenue, operating cash flow, and free cash flow were all higher, and the free cash flow margin improved modestly. Versus the same quarter last year, revenue and free cash flow were higher, but the free cash flow margin was slightly weaker.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$6.5B
Trailing twelve-month free cash flow.
Quarter free cash flow
$2.0B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$2.0B
Cash generated by operations before capital spending.
CapEx
$57.0M
Capital spending and related asset purchases.
FCF margin
36.3%
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 |
|---|---|---|---|---|---|
| 2023-12-01 | $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% |
| 2024-08-30 | $5.4B | $2.0B | $57.0M | $2.0B | 36.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 116.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.1% | Lower capital intensity usually supports FCF margin. |
| Net cash | $3.1B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Revenue growth driving cash generation
Revenue increased both sequentially and year-over-year, and operating cash flow followed suit, rising to its highest level in the periods shown. The increase in operating cash flow was the primary contributor to the higher free cash flow.
Higher operating cash flow from revenue growth more than offset the increase in capital expenditure, resulting in improved free cash flow.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue growth drove higher operating cash flow, and with capital expenditure remaining low relative to revenue, free cash flow increased. The free cash flow margin edged up from the prior quarter but was slightly below the year-ago level.
Compared to the prior quarter, revenue, operating cash flow, and free cash flow were all higher, and the free cash flow margin improved modestly. Versus the same quarter last year, revenue and free cash flow were higher, but the free cash flow margin was slightly weaker.
Monitor the trend in capital expenditure, which increased sequentially and could pressure free cash flow if it continues to rise.