Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Cash conversion weakened this quarter as operating cash flow and free cash flow fell relative to the prior quarter and the year-ago period. The free cash flow margin contracted compared with both comparable quarters.
- Revenue declined, while operating cash flow decreased more sharply, resulting in lower free cash flow. Capital expenditure also decreased, but not enough to offset the drop in operating cash flow, leading to a narrower free cash flow margin.
- Compared with the immediately preceding quarter, operating cash flow, free cash flow, and free cash flow margin were all lower. Versus the same quarter last year, the same metrics also weakened, though capital expenditure was slightly lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.7B
Trailing twelve-month free cash flow.
Quarter free cash flow
$295.5M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$397.9M
Cash generated by operations before capital spending.
CapEx
$102.4M
Capital spending and related asset purchases.
FCF margin
6.7%
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 |
|---|---|---|---|---|---|
| 2025-05-25 | $4.6B | $611.6M | $220.2M | $391.4M | 8.6% |
| 2025-08-24 | $4.5B | $397.0M | $109.5M | $287.5M | 6.4% |
| 2025-11-23 | $4.9B | $819.3M | $143.6M | $675.7M | 13.9% |
| 2026-02-22 | $4.4B | $397.9M | $102.4M | $295.5M | 6.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 97.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.3% | 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 Decline
The most observable driver this quarter was the substantial decrease in operating cash flow relative to both the prior quarter and the year-ago quarter. The company's filing attributed a similar decline over the nine-month period primarily to lower net earnings, partially offset by deferred tax and other items.
This lower cash generation directly compressed free cash flow and the free cash flow margin, reducing the company's cash conversion efficiency.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue declined, while operating cash flow decreased more sharply, resulting in lower free cash flow. Capital expenditure also decreased, but not enough to offset the drop in operating cash flow, leading to a narrower free cash flow margin.
Compared with the immediately preceding quarter, operating cash flow, free cash flow, and free cash flow margin were all lower. Versus the same quarter last year, the same metrics also weakened, though capital expenditure was slightly lower.
Monitor the trajectory of operating cash flow in upcoming quarters given its significant decrease from both comparison periods.