Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow this quarter weakened sharply compared with both the preceding quarter and the same quarter last year, as operating cash flow declined more than the reduction in capital expenditure. Revenue was slightly lower than both prior periods, and the free cash flow margin contracted accordingly.
- Revenue conversion into operating cash flow weakened notably, with operating cash flow declining while revenue remained relatively stable. Capital expenditure was lower than both prior periods, but this reduction was insufficient to offset the drop in operating cash flow, resulting in a lower free cash flow margin.
- Compared with the preceding quarter, operating cash flow, free cash flow, and free cash flow margin all decreased sharply, while capital expenditure was lower. Versus the same quarter last year, all cash flow metrics also declined, with operating cash flow and free cash flow materially lower, though capital expenditure was reduced as well.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.6B
Trailing twelve-month free cash flow.
Quarter free cash flow
$420.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.2B
Cash generated by operations before capital spending.
CapEx
$767.0M
Capital spending and related asset purchases.
FCF margin
1.9%
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 |
|---|---|---|---|---|---|
| 2023-11-30 | $22.2B | $1.8B | $1.3B | $469.0M | 2.1% |
| 2024-02-29 | $21.7B | $1.6B | $1.4B | $231.0M | 1.1% |
| 2024-05-31 | $22.1B | $2.7B | $1.2B | $1.5B | 6.8% |
| 2024-08-31 | $21.6B | $1.2B | $767.0M | $420.0M | 1.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 52.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.6% | 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.
Sharp contraction in operating cash flow
Operating cash flow dropped substantially from both the prior quarter and the year-ago period, while capital expenditure also fell but by a smaller magnitude. This divergence made operating cash flow the dominant factor behind the weaker free cash flow and narrower margin.
The steep decline in operating cash flow drove free cash flow to a level well below both the preceding quarter and the same quarter last year.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue conversion into operating cash flow weakened notably, with operating cash flow declining while revenue remained relatively stable. Capital expenditure was lower than both prior periods, but this reduction was insufficient to offset the drop in operating cash flow, resulting in a lower free cash flow margin.
Compared with the preceding quarter, operating cash flow, free cash flow, and free cash flow margin all decreased sharply, while capital expenditure was lower. Versus the same quarter last year, all cash flow metrics also declined, with operating cash flow and free cash flow materially lower, though capital expenditure was reduced as well.
Monitor whether capital expenditure continues to trend lower, as its reduction partially cushioned the free cash flow decline but may signal changing investment priorities.