Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow improved from the prior-year quarter but weakened sequentially. The free cash flow margin similarly showed year-over-year improvement while declining compared to the previous quarter.
- Operating cash flow converted into free cash flow at a lower rate than the prior quarter due to higher capital spending, but the conversion was better than the same quarter last year as both operating cash flow rose and capital expenditure fell.
- Compared to the immediately preceding quarter, free cash flow decreased as revenue and operating cash flow declined while capital expenditure increased. Versus the same quarter one year earlier, free cash flow rose, driven by stronger operating cash flow and reduced capital spending.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.5B
Trailing twelve-month free cash flow.
Quarter free cash flow
$575.2M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$863.7M
Cash generated by operations before capital spending.
CapEx
$288.5M
Capital spending and related asset purchases.
FCF margin
12.2%
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 |
|---|---|---|---|---|---|
| 2023-08-27 | $4.9B | $378.1M | $141.7M | $236.4M | 4.8% |
| 2023-11-26 | $5.1B | $1.1B | $152.2M | $965.5M | 18.8% |
| 2024-02-25 | $5.1B | $943.1M | $191.7M | $751.4M | 14.7% |
| 2024-05-26 | $4.7B | $863.7M | $288.5M | $575.2M | 12.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 103.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 6.1% | 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.
Improved operating cash flow
Operating cash flow was higher than the same quarter last year, providing a solid foundation for free cash generation.
This improvement was the key factor behind the year-over-year expansion of the free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow converted into free cash flow at a lower rate than the prior quarter due to higher capital spending, but the conversion was better than the same quarter last year as both operating cash flow rose and capital expenditure fell.
Compared to the immediately preceding quarter, free cash flow decreased as revenue and operating cash flow declined while capital expenditure increased. Versus the same quarter one year earlier, free cash flow rose, driven by stronger operating cash flow and reduced capital spending.
Monitor the sequential increase in capital expenditure, which weighed on free cash flow conversion during the quarter.