Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow improved sharply from the prior quarter but remained lower than the same quarter last year. The sequential gain was driven by a large increase in operating cash flow, while capital expenditure declined.
- Revenue was higher than both the prior quarter and the year-ago quarter. Operating cash flow rose significantly from the prior quarter but was lower than a year ago, leading to a free cash flow margin that improved from the prior quarter but weakened compared to the same quarter last year.
- Compared to the immediately preceding quarter, free cash flow and free cash flow margin were both higher, driven by stronger operating cash flow and lower capital expenditure. Versus the same quarter one year earlier, free cash flow and free cash flow margin were lower, as operating cash flow declined despite a slight reduction in capital expenditure.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$3.8B
Trailing twelve-month free cash flow.
Quarter free cash flow
$800.8M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$819.2M
Cash generated by operations before capital spending.
CapEx
$18.4M
Capital spending and related asset purchases.
FCF margin
8.5%
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 |
|---|---|---|---|---|---|
| 2023-11-30 | $11.0B | $2.6B | $46.2M | $2.5B | 23.2% |
| 2024-02-29 | $7.3B | $367.9M | $72.9M | $294.9M | 4.0% |
| 2024-05-31 | $8.8B | $241.8M | $38.8M | $203.0M | 2.3% |
| 2024-08-31 | $9.4B | $819.2M | $18.4M | $800.8M | 8.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 68.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.2% | 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 Recovery
Operating cash flow increased substantially from the prior quarter, driving the improvement in free cash flow and margin. This was the strongest observable factor in the sequential comparison.
The higher operating cash flow was the primary reason free cash flow improved sequentially.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher than both the prior quarter and the year-ago quarter. Operating cash flow rose significantly from the prior quarter but was lower than a year ago, leading to a free cash flow margin that improved from the prior quarter but weakened compared to the same quarter last year.
Compared to the immediately preceding quarter, free cash flow and free cash flow margin were both higher, driven by stronger operating cash flow and lower capital expenditure. Versus the same quarter one year earlier, free cash flow and free cash flow margin were lower, as operating cash flow declined despite a slight reduction in capital expenditure.
Monitor whether operating cash flow can sustain its sequential improvement, as it is the primary component of free cash flow.