Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow remained nearly stable compared to the same quarter last year, as lower capital expenditure largely offset a modest decline in operating cash flow. Relative to the prior quarter, free cash flow decreased sharply due to a significantly lower operating cash flow despite reduced capital spending.
- Operating cash flow as a percentage of revenue weakened from the prior quarter, while capital expenditure as a share of operating cash flow decreased, resulting in a free cash flow margin that was comparable to the prior year but much lower than the preceding quarter.
- Compared to the immediately preceding quarter, revenue was lower and operating cash flow decreased substantially, causing free cash flow to drop sharply. Versus the same quarter one year earlier, revenue was similar, operating cash flow was slightly lower, and free cash flow was nearly unchanged.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$649.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
$78.4M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$115.5M
Cash generated by operations before capital spending.
CapEx
$37.1M
Capital spending and related asset purchases.
FCF margin
4.9%
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 |
|---|---|---|---|---|---|
| 2024-05-31 | $1.6B | $163.1M | $68.3M | $94.8M | 5.8% |
| 2024-08-31 | $1.7B | $161.7M | $59.0M | $102.7M | 6.1% |
| 2024-11-30 | $1.8B | $458.7M | $85.6M | $373.1M | 20.8% |
| 2025-02-28 | $1.6B | $115.5M | $37.1M | $78.4M | 4.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 48.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.3% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$3.7B | 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 Weakening
Operating cash flow fell significantly versus the prior quarter, driven by lower revenue and likely changes in working capital items. Capital expenditure also declined but not enough to offset the drop in cash generation.
The weakened operating cash flow constrained free cash flow despite reduced capital spending, compressing the free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a percentage of revenue weakened from the prior quarter, while capital expenditure as a share of operating cash flow decreased, resulting in a free cash flow margin that was comparable to the prior year but much lower than the preceding quarter.
Compared to the immediately preceding quarter, revenue was lower and operating cash flow decreased substantially, causing free cash flow to drop sharply. Versus the same quarter one year earlier, revenue was similar, operating cash flow was slightly lower, and free cash flow was nearly unchanged.
Monitor whether operating cash flow can recover from its sequential decline, as it was the primary factor behind the decrease in free cash flow this quarter.