Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Cash conversion improved sharply as operating cash flow rose while capital expenditure declined, yielding a much higher free cash flow margin. Revenue was lower than the prior quarter but higher than the same quarter last year.
- Operating cash flow increased substantially relative to both the prior quarter and the year-ago quarter, while capital expenditure decreased compared to the prior quarter. This drove free cash flow higher and expanded the free cash flow margin.
- Compared to the prior quarter, revenue was lower but operating cash flow and free cash flow were higher, resulting in a stronger free cash flow margin. Versus the same quarter last year, all metrics improved: revenue, operating cash flow, free cash flow, and margin were all higher.
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
$2.0B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$2.2B
Cash generated by operations before capital spending.
CapEx
$200.0M
Capital spending and related asset purchases.
FCF margin
16.4%
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 |
|---|---|---|---|---|---|
| 2022-05-31 | $12.2B | $1.2B | $242.0M | $909.0M | 7.4% |
| 2022-08-31 | $12.7B | $357.0M | $264.0M | $93.0M | 0.7% |
| 2022-11-30 | $13.3B | $1.0B | $236.0M | $765.0M | 5.7% |
| 2023-02-28 | $12.4B | $2.2B | $200.0M | $2.0B | 16.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 163.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.6% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$2.5B | 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 increased significantly from both the prior quarter and the year-ago quarter, providing the primary lift to free cash flow. This improvement occurred even as revenue declined sequentially.
The higher operating cash flow drove a substantial expansion in free cash flow and 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 increased substantially relative to both the prior quarter and the year-ago quarter, while capital expenditure decreased compared to the prior quarter. This drove free cash flow higher and expanded the free cash flow margin.
Compared to the prior quarter, revenue was lower but operating cash flow and free cash flow were higher, resulting in a stronger free cash flow margin. Versus the same quarter last year, all metrics improved: revenue, operating cash flow, free cash flow, and margin were all higher.
Monitor the trajectory of capital expenditure, as it decreased from the prior quarter and could influence future free cash flow conversion.