Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue and operating cash flow both improved compared to the prior quarter, leading to higher free cash flow and a stronger margin. However, free cash flow and margin were significantly lower than the same quarter one year earlier, driven by a much larger decline in operating cash flow.
- Operating cash flow as a share of revenue was lower than the year-ago quarter but higher than the prior quarter, resulting in a free cash flow margin that improved sequentially but weakened year over year. Capital expenditure remained modest relative to operating cash flow in all periods.
- Compared to the prior quarter, revenue, operating cash flow, and free cash flow all increased, and the free cash flow margin improved. Versus the same quarter one year earlier, revenue was lower, operating cash flow was substantially lower, and free cash flow and margin both weakened markedly.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.2B
Trailing twelve-month free cash flow.
Quarter free cash flow
$933.1M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$974.5M
Cash generated by operations before capital spending.
CapEx
$41.4M
Capital spending and related asset purchases.
FCF margin
9.4%
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 |
|---|---|---|---|---|---|
| 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% |
| 2024-11-30 | $9.9B | $974.5M | $41.4M | $933.1M | 9.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 85.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.4% | Lower capital intensity usually supports FCF margin. |
| Net cash | $720.4M | 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
Operating cash flow was substantially lower than the same quarter one year earlier, despite a smaller decline in revenue. This drove the significant year-over-year reduction in free cash flow and margin.
The year-over-year drop in operating cash flow was the strongest observable driver of the weakened free cash flow performance.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a share of revenue was lower than the year-ago quarter but higher than the prior quarter, resulting in a free cash flow margin that improved sequentially but weakened year over year. Capital expenditure remained modest relative to operating cash flow in all periods.
Compared to the prior quarter, revenue, operating cash flow, and free cash flow all increased, and the free cash flow margin improved. Versus the same quarter one year earlier, revenue was lower, operating cash flow was substantially lower, and free cash flow and margin both weakened markedly.
Monitor the trajectory of operating cash flow relative to revenue, as its year-over-year decline was the primary factor behind the weakened free cash flow.