Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was stable versus the prior quarter but higher than a year ago, while operating cash flow and free cash flow improved markedly. The free cash flow margin strengthened compared to both periods.
- Revenue was unchanged from the previous quarter, but operating cash flow increased substantially, leading to a significantly higher free cash flow despite a modest rise in capital expenditure. The resulting free cash flow margin improved accordingly.
- Compared to the prior quarter, operating cash flow, free cash flow, and free cash flow margin were all higher, while revenue was similar. Versus the same quarter one year earlier, revenue, operating cash flow, free cash flow, and margin were all higher, with capital expenditure also higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.5B
Trailing twelve-month free cash flow.
Quarter free cash flow
$550.1M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$657.1M
Cash generated by operations before capital spending.
CapEx
$107.0M
Capital spending and related asset purchases.
FCF margin
22.9%
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 |
|---|---|---|---|---|---|
| 2023-05-31 | $2.3B | $542.0M | $107.0M | $435.0M | 19.0% |
| 2023-08-31 | $2.3B | $336.9M | $106.7M | $230.2M | 9.8% |
| 2023-11-30 | $2.4B | $392.7M | $93.8M | $298.9M | 12.6% |
| 2024-02-29 | $2.4B | $657.1M | $107.0M | $550.1M | 22.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 138.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 4.4% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$2.3B | 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 Strength
Operating cash flow increased significantly from both the prior quarter and the year-ago quarter, enabling free cash flow to rise even with a higher capital expenditure. The filing notes that operating cash flows have historically been a significant source of liquidity.
The improved cash conversion efficiency led to a higher free cash flow margin compared to both comparison periods.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was unchanged from the previous quarter, but operating cash flow increased substantially, leading to a significantly higher free cash flow despite a modest rise in capital expenditure. The resulting free cash flow margin improved accordingly.
Compared to the prior quarter, operating cash flow, free cash flow, and free cash flow margin were all higher, while revenue was similar. Versus the same quarter one year earlier, revenue, operating cash flow, free cash flow, and margin were all higher, with capital expenditure also higher.
Monitor the level of operating cash flow given the substantial sequential increase, as any decline could directly affect free cash flow generation.