Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue and operating cash flow both improved compared to the prior quarter and the same quarter last year. Free cash flow margin weakened versus both comparison periods due to a larger gap between operating cash flow and capital expenditure.
- Operating cash flow was lower than revenue, and after deducting capital expenditure, free cash flow was positive but at a reduced margin relative to revenue. The conversion from revenue to free cash flow was less efficient than in either the prior quarter or the year-ago quarter.
- Compared to the immediately preceding quarter, revenue was higher but operating cash flow was lower, while capital expenditure decreased, resulting in a lower free cash flow and a weakened free cash flow margin. Versus the same quarter one year earlier, revenue was higher, operating cash flow was lower, capital expenditure was lower, and free cash flow was lower, with a weakened margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.2B
Trailing twelve-month free cash flow.
Quarter free cash flow
$628.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.2B
Cash generated by operations before capital spending.
CapEx
$577.0M
Capital spending and related asset purchases.
FCF margin
8.0%
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 | $5.4B | $922.0M | $675.0M | $247.0M | 4.6% |
| 2024-02-29 | $5.4B | $1.8B | $2.1B | -$370.0M | -6.8% |
| 2024-05-31 | $5.8B | $2.0B | $1.3B | $720.0M | 12.5% |
| 2024-08-31 | $7.9B | $1.2B | $577.0M | $628.0M | 8.0% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 36.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 7.3% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$28.1B | 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 relative to revenue
Revenue increased from both comparison periods, yet operating cash flow declined. This divergence is the strongest observable driver of the weakened free cash flow margin.
Lower operating cash flow relative to revenue directly reduced free cash flow and margin despite lower capital expenditure.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow was lower than revenue, and after deducting capital expenditure, free cash flow was positive but at a reduced margin relative to revenue. The conversion from revenue to free cash flow was less efficient than in either the prior quarter or the year-ago quarter.
Compared to the immediately preceding quarter, revenue was higher but operating cash flow was lower, while capital expenditure decreased, resulting in a lower free cash flow and a weakened free cash flow margin. Versus the same quarter one year earlier, revenue was higher, operating cash flow was lower, capital expenditure was lower, and free cash flow was lower, with a weakened margin.
Monitor the relationship between operating cash flow and capital expenditure, as the gap widened compared to both the prior quarter and the year-ago quarter, compressing free cash flow margin.