Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Cash conversion improved year-over-year but weakened sharply from the preceding quarter due to a significant drop in operating cash flow. The free cash flow margin was stable compared to the same quarter last year.
- Revenue increased from both the prior quarter and a year ago. However, operating cash flow fell substantially from the previous quarter, resulting in a much lower free cash flow and free cash flow margin. Capital expenditure decreased from both comparison periods.
- Compared to the preceding quarter, free cash flow and free cash flow margin were much lower, driven by a steep decline in operating cash flow. Versus the year-ago quarter, free cash flow and free cash flow margin were slightly higher as revenue and operating cash flow improved while capital expenditure moderated.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$11.5B
Trailing twelve-month free cash flow.
Quarter free cash flow
$755.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$892.0M
Cash generated by operations before capital spending.
CapEx
$137.0M
Capital spending and related asset purchases.
FCF margin
8.1%
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 |
|---|---|---|---|---|---|
| 2023-10-31 | $8.7B | $1.5B | $166.0M | $1.4B | 15.7% |
| 2024-01-31 | $9.3B | $3.4B | $147.0M | $3.3B | 35.1% |
| 2024-04-30 | $9.1B | $6.2B | $163.0M | $6.1B | 66.6% |
| 2024-07-31 | $9.3B | $892.0M | $137.0M | $755.0M | 8.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 52.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.5% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$748.0M | 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 Drop
Operating cash flow fell sharply from the prior quarter despite higher revenue, causing a substantial reduction in free cash flow. The company's filing notes that net cash provided by operating activities could be affected by various risks and uncertainties.
This quarter's free cash flow generation was materially weaker than the preceding period.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased from both the prior quarter and a year ago. However, operating cash flow fell substantially from the previous quarter, resulting in a much lower free cash flow and free cash flow margin. Capital expenditure decreased from both comparison periods.
Compared to the preceding quarter, free cash flow and free cash flow margin were much lower, driven by a steep decline in operating cash flow. Versus the year-ago quarter, free cash flow and free cash flow margin were slightly higher as revenue and operating cash flow improved while capital expenditure moderated.
Monitor the level of operating cash flow in the next quarter given its significant volatility from the preceding period.