Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue, operating cash flow, and capital expenditure all increased from the prior quarter and from the same quarter a year ago. Free cash flow turned positive compared to the year-ago quarter but was lower than the immediately preceding quarter.
- Operating cash flow as a proportion of revenue improved significantly compared to the same quarter a year ago and was higher than the prior quarter. However, because capital expenditure rose more than operating cash flow relative to the prior quarter, free cash flow margin weakened sequentially.
- Compared with the immediately preceding quarter, revenue was higher, operating cash flow improved, and free cash flow was lower. Versus the same quarter one year earlier, all metrics were stronger, with free cash flow shifting from negative to positive.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$121.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
$285.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$3.4B
Cash generated by operations before capital spending.
CapEx
$3.1B
Capital spending and related asset purchases.
FCF margin
3.7%
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 | $4.7B | $1.4B | $1.8B | -$395.0M | -8.4% |
| 2024-02-29 | $5.8B | $1.2B | $1.4B | -$165.0M | -2.8% |
| 2024-05-30 | $6.8B | $2.5B | $2.1B | $396.0M | 5.8% |
| 2024-08-29 | $7.8B | $3.4B | $3.1B | $285.0M | 3.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 32.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 40.3% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$4.3B | 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 Improvement
Operating cash flow increased substantially from both the prior quarter and the year-ago period, supporting a much higher free cash flow year over year. The company's filing notes that cash generated from operations is highly dependent on selling prices, which can vary significantly.
The stronger operating cash flow was the primary factor behind the swing to positive free cash flow compared with the prior year.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a proportion of revenue improved significantly compared to the same quarter a year ago and was higher than the prior quarter. However, because capital expenditure rose more than operating cash flow relative to the prior quarter, free cash flow margin weakened sequentially.
Compared with the immediately preceding quarter, revenue was higher, operating cash flow improved, and free cash flow was lower. Versus the same quarter one year earlier, all metrics were stronger, with free cash flow shifting from negative to positive.
Monitor the level of capital expenditure relative to operating cash flow, as the sequential rise in capex drove a lower free cash flow despite higher operating cash flow.