Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
In the first quarter of fiscal 2025, free cash flow improved significantly from the same quarter last year, though it declined from the immediately preceding quarter. The free cash flow margin rose year over year but fell compared to the previous quarter.
- Revenue was slightly higher than the prior quarter and slightly lower than a year ago. Operating cash flow increased sharply year over year but decreased from the preceding quarter. Capital expenditure was lower than the previous quarter and broadly stable compared with the prior year quarter, supporting a higher free cash flow than a year earlier.
- Compared to the preceding quarter, free cash flow and margin weakened as operating cash flow fell and capital expenditure decreased less proportionately. Versus the same quarter last year, free cash flow and margin improved markedly, driven by a much higher operating cash flow despite slightly lower revenue.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.8B
Trailing twelve-month free cash flow.
Quarter free cash flow
$483.9M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$624.2M
Cash generated by operations before capital spending.
CapEx
$140.3M
Capital spending and related asset purchases.
FCF margin
10.0%
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 |
|---|---|---|---|---|---|
| 2023-11-26 | $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% |
| 2024-08-25 | $4.8B | $624.2M | $140.3M | $483.9M | 10.0% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 83.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.9% | 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.
Working capital timing
Management attributed the year-over-year increase in operating cash flow primarily to changes in current assets and liabilities, with the timing of accounts payable being a significant factor. This more than offset a decrease in net earnings.
This driver provided a substantial boost to free cash flow in the quarter relative to the prior year.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was slightly higher than the prior quarter and slightly lower than a year ago. Operating cash flow increased sharply year over year but decreased from the preceding quarter. Capital expenditure was lower than the previous quarter and broadly stable compared with the prior year quarter, supporting a higher free cash flow than a year earlier.
Compared to the preceding quarter, free cash flow and margin weakened as operating cash flow fell and capital expenditure decreased less proportionately. Versus the same quarter last year, free cash flow and margin improved markedly, driven by a much higher operating cash flow despite slightly lower revenue.
Monitor the sustainability of the operating cash flow level, which benefited from favorable timing of accounts payable changes in the quarter.