Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was lower than the same quarter last year but higher than the prior quarter. Free cash flow and free cash flow margin improved sequentially and year-over-year, driven by stronger operating cash flow relative to capital expenditure.
- Operating cash flow exceeded capital expenditure by a wide margin, resulting in a free cash flow margin that was higher than both the prior quarter and the same quarter last year. The conversion from revenue to free cash flow strengthened compared to both periods.
- Compared to the prior quarter, revenue, operating cash flow, and free cash flow were all higher, while capital expenditure was lower. Versus the same quarter last year, revenue was lower but operating cash flow and free cash flow were higher, with capital expenditure also higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$5.2B
Trailing twelve-month free cash flow.
Quarter free cash flow
$929.5M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$951.9M
Cash generated by operations before capital spending.
CapEx
$22.3M
Capital spending and related asset purchases.
FCF margin
10.6%
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 |
|---|---|---|---|---|---|
| 2022-11-30 | $10.2B | $2.7B | $29.7M | $2.7B | 26.4% |
| 2023-02-28 | $6.5B | $978.2M | $5.4M | $972.8M | 15.0% |
| 2023-05-31 | $8.0B | $660.5M | $25.8M | $634.6M | 7.9% |
| 2023-08-31 | $8.7B | $951.9M | $22.3M | $929.5M | 10.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 83.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.3% | 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 Strength
Operating cash flow was the strongest observable driver, increasing sequentially and year-over-year, which directly lifted free cash flow and margin despite a lower revenue base compared to last year.
Higher operating cash flow more than offset the year-over-year increase in capital expenditure, leading to improved free cash flow and margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow exceeded capital expenditure by a wide margin, resulting in a free cash flow margin that was higher than both the prior quarter and the same quarter last year. The conversion from revenue to free cash flow strengthened compared to both periods.
Compared to the prior quarter, revenue, operating cash flow, and free cash flow were all higher, while capital expenditure was lower. Versus the same quarter last year, revenue was lower but operating cash flow and free cash flow were higher, with capital expenditure also higher.
Monitor the trend in capital expenditure relative to operating cash flow, as it was higher year-over-year despite the improvement in free cash flow.