Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
In the second quarter of fiscal 2024, free cash flow increased significantly compared to both the prior quarter and the same quarter last year, driven by a substantial rise in operating cash flow. The free cash flow margin also improved markedly over both periods.
- Revenue was slightly lower than the year-ago quarter but higher than the previous quarter. Operating cash flow increased sharply versus both periods, while capital expenditure saw a modest rise. The combination resulted in a strong conversion of revenue into free cash flow.
- Compared to the immediately preceding quarter, free cash flow was substantially higher, reflecting a large improvement in operating cash flow as revenue increased. Versus the same quarter last year, free cash flow improved despite a slight decline in revenue, due to stronger cash generation from operations.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.3B
Trailing twelve-month free cash flow.
Quarter free cash flow
$965.5M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.1B
Cash generated by operations before capital spending.
CapEx
$152.2M
Capital spending and related asset purchases.
FCF margin
18.8%
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 |
|---|---|---|---|---|---|
| 2023-02-26 | $5.1B | $826.3M | $124.6M | $701.7M | 13.7% |
| 2023-05-28 | $5.0B | $751.6M | $338.2M | $413.4M | 8.2% |
| 2023-08-27 | $4.9B | $378.1M | $141.7M | $236.4M | 4.8% |
| 2023-11-26 | $5.1B | $1.1B | $152.2M | $965.5M | 18.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 162.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.0% | 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.
Operating Cash Flow Strength
Operating cash flow was markedly higher than both the prior quarter and the year-ago quarter, even though revenue was slightly below last year's level. This improvement was the primary factor behind the free cash flow increase.
The strong operating cash flow more than offset higher capital spending, enabling a substantial free cash flow margin expansion.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was slightly lower than the year-ago quarter but higher than the previous quarter. Operating cash flow increased sharply versus both periods, while capital expenditure saw a modest rise. The combination resulted in a strong conversion of revenue into free cash flow.
Compared to the immediately preceding quarter, free cash flow was substantially higher, reflecting a large improvement in operating cash flow as revenue increased. Versus the same quarter last year, free cash flow improved despite a slight decline in revenue, due to stronger cash generation from operations.
Monitor the trend in operating cash flow, as the current level may not be sustained if revenue or margins shift.