Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue, operating cash flow, and free cash flow all rose substantially compared to the prior quarter, but free cash flow margin weakened slightly versus the same quarter last year. The quarter's cash conversion was strong, supported by a higher operating cash flow relative to revenue.
- Operating cash flow was much higher than capital expenditure, leading to a free cash flow margin that improved from the prior quarter but declined from the year-ago quarter. Revenue increased from both comparison periods, and operating cash flow outpaced revenue growth versus the prior quarter.
- Compared to the prior quarter, revenue, operating cash flow, and free cash flow were all higher, while the free cash flow margin improved. Versus the same quarter last year, revenue was higher but operating cash flow, free cash flow, and free cash flow margin were all lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$5.1B
Trailing twelve-month free cash flow.
Quarter free cash flow
$2.5B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$2.6B
Cash generated by operations before capital spending.
CapEx
$46.2M
Capital spending and related asset purchases.
FCF margin
23.2%
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 |
|---|---|---|---|---|---|
| 2023-02-28 | $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% |
| 2023-11-30 | $11.0B | $2.6B | $46.2M | $2.5B | 23.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 186.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.4% | 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 substantially higher than in the prior quarter and only slightly lower than a year ago, while capital expenditure remained modest. This drove a notable increase in free cash flow sequentially.
The elevated operating cash flow was the primary factor behind the sequential improvement in 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 was much higher than capital expenditure, leading to a free cash flow margin that improved from the prior quarter but declined from the year-ago quarter. Revenue increased from both comparison periods, and operating cash flow outpaced revenue growth versus the prior quarter.
Compared to the prior quarter, revenue, operating cash flow, and free cash flow were all higher, while the free cash flow margin improved. Versus the same quarter last year, revenue was higher but operating cash flow, free cash flow, and free cash flow margin were all lower.
Monitor the trend in free cash flow margin relative to operating cash flow, as it decreased year-over-year despite higher revenue.