Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
In FY2026 Q2, free cash flow fell sharply from the previous quarter due to a significant drop in operating cash flow relative to revenue. Compared to the same quarter last year, both operating cash flow and free cash flow were lower, resulting in a narrower free cash flow margin.
- Revenue increased from both the prior quarter and the year-ago quarter, but operating cash flow was substantially lower than in the previous quarter, yielding a free cash flow margin that weakened significantly. Capital expenditure was slightly higher than a year ago but lower than the prior quarter.
- Compared to FY2026 Q1, free cash flow margin contracted sharply because operating cash flow decreased despite higher revenue. Versus FY2025 Q2, both operating cash flow and free cash flow were lower, though revenue was higher, indicating a weaker cash conversion performance.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$12.5B
Trailing twelve-month free cash flow.
Quarter free cash flow
$605.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$740.0M
Cash generated by operations before capital spending.
CapEx
$135.0M
Capital spending and related asset purchases.
FCF margin
5.9%
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 |
|---|---|---|---|---|---|
| 2024-10-31 | $9.4B | $2.0B | $204.0M | $1.8B | 18.8% |
| 2025-01-31 | $10.0B | $4.0B | $154.0M | $3.8B | 38.2% |
| 2025-04-30 | $9.8B | $6.5B | $179.0M | $6.3B | 64.1% |
| 2025-07-31 | $10.2B | $740.0M | $135.0M | $605.0M | 5.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 32.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.3% | Lower capital intensity usually supports FCF margin. |
| Net cash | $1.9B | 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 Variability
The most observable driver was a substantial sequential drop in operating cash flow from the prior quarter, which was the primary factor behind the lower free cash flow. No specific cause is provided in the filing context beyond general risk factors.
This decline sharply reduced free cash flow and margin relative to the prior quarter, despite higher revenue.
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 the year-ago quarter, but operating cash flow was substantially lower than in the previous quarter, yielding a free cash flow margin that weakened significantly. Capital expenditure was slightly higher than a year ago but lower than the prior quarter.
Compared to FY2026 Q1, free cash flow margin contracted sharply because operating cash flow decreased despite higher revenue. Versus FY2025 Q2, both operating cash flow and free cash flow were lower, though revenue was higher, indicating a weaker cash conversion performance.
Monitor the trajectory of operating cash flow, as its large sequential decline in this quarter warrants attention.