Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was slightly higher than the prior quarter but lower than the same quarter last year. Free cash flow improved compared to both the preceding quarter and the year-ago quarter, supported by a higher operating cash flow and a lower capital expenditure relative to the prior year.
- Operating cash flow as a proportion of revenue was higher than both the prior quarter and the year-ago quarter. With capital expenditure lower than the prior year, free cash flow margin improved compared to both comparison periods.
- Compared to the immediately preceding quarter, revenue was slightly higher, operating cash flow was higher, capital expenditure was higher, and free cash flow was higher. Compared to the same quarter one year earlier, revenue was lower, operating cash flow was higher, capital expenditure was lower, and free cash flow was higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$6.6B
Trailing twelve-month free cash flow.
Quarter free cash flow
$2.4B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$2.6B
Cash generated by operations before capital spending.
CapEx
$213.0M
Capital spending and related asset purchases.
FCF margin
19.1%
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 |
|---|---|---|---|---|---|
| 2023-08-31 | $12.9B | -$66.0M | $253.0M | -$319.0M | -2.5% |
| 2023-11-30 | $13.4B | $2.8B | $205.0M | $2.6B | 19.5% |
| 2024-02-29 | $12.4B | $2.1B | $141.0M | $1.9B | 15.4% |
| 2024-05-31 | $12.6B | $2.6B | $213.0M | $2.4B | 19.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 160.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.7% | Lower capital intensity usually supports FCF margin. |
| Net cash | $957.0M | 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 was higher than both the prior quarter and the year-ago quarter, providing the primary support for the improvement in free cash flow. The filing notes that for the full fiscal year, operating cash inflow increased compared to the prior year, driven by net income adjusted for non-cash items and a favorable net change in working capital.
Higher operating cash flow directly lifted free cash flow and the free cash flow margin in the quarter.
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 was higher than both the prior quarter and the year-ago quarter. With capital expenditure lower than the prior year, free cash flow margin improved compared to both comparison periods.
Compared to the immediately preceding quarter, revenue was slightly higher, operating cash flow was higher, capital expenditure was higher, and free cash flow was higher. Compared to the same quarter one year earlier, revenue was lower, operating cash flow was higher, capital expenditure was lower, and free cash flow was higher.
Monitor the trend in capital expenditure, which increased from the prior quarter but decreased from the year-ago quarter.