Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Applied Digital Corporation's free cash flow was deeply negative in the current quarter, driven by a sharp operating cash outflow and elevated capital expenditure. Revenue turned positive compared to the prior quarter, but the free cash flow margin weakened significantly.
- Revenue was positive, yet operating cash flow was negative, meaning cash conversion from revenue was poor. Capital expenditure was substantial relative to revenue, causing free cash flow to be deeply negative and the free cash flow margin to be deeply negative.
- Compared to the immediately preceding quarter, revenue improved to positive from negative, but operating cash flow weakened from positive to negative, and free cash flow became more negative with a lower margin. Versus the same quarter one year earlier, revenue was higher, operating cash flow was more negative, capital expenditure was higher, and free cash flow was more negative with a weaker margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$997.8M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$331.4M
Free cash flow in the selected fiscal quarter.
Operating cash flow
-$82.0M
Cash generated by operations before capital spending.
CapEx
$249.4M
Capital spending and related asset purchases.
FCF margin
-516.1%
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 |
|---|---|---|---|---|---|
| 2024-11-30 | $36.2M | -$52.3M | $171.0M | -$223.3M | -617.5% |
| 2025-02-28 | $52.9M | $5.9M | $257.5M | -$251.6M | -475.4% |
| 2025-05-31 | -$33.3M | $6.9M | $198.3M | -$191.4M | 574.8% |
| 2025-08-31 | $64.2M | -$82.0M | $249.4M | -$331.4M | -516.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 1958.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 388.4% | 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.
Capital expenditure level
Capital expenditure was higher than both the prior quarter and the same quarter last year, and it was the largest absolute use of cash among the reported metrics.
The elevated capital expenditure directly contributed to the widening of negative free cash flow.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was positive, yet operating cash flow was negative, meaning cash conversion from revenue was poor. Capital expenditure was substantial relative to revenue, causing free cash flow to be deeply negative and the free cash flow margin to be deeply negative.
Compared to the immediately preceding quarter, revenue improved to positive from negative, but operating cash flow weakened from positive to negative, and free cash flow became more negative with a lower margin. Versus the same quarter one year earlier, revenue was higher, operating cash flow was more negative, capital expenditure was higher, and free cash flow was more negative with a weaker margin.
Monitor the trend in operating cash flow, as it shifted from positive in the prior quarter to negative in the current quarter.