Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was unchanged from the prior quarter but operating cash flow improved sharply, turning free cash flow slightly positive after a negative result. Compared with the same quarter last year, revenue was higher and operating cash flow was similar, but a substantial increase in capital expenditure reduced free cash flow to a fraction of the prior level.
- Operating cash flow was nearly equal to capital expenditure, leaving free cash flow minimal and the free cash flow margin near zero. Revenue was stable, so the conversion rate was primarily determined by the unusually high level of capital spending relative to operating cash generation.
- Compared to the immediately preceding quarter, operating cash flow was higher, capital expenditure was higher, and free cash flow improved from negative to slightly positive. Versus the same quarter one year earlier, operating cash flow was slightly higher, but capital expenditure was significantly higher, resulting in much lower free cash flow and a much lower free cash flow margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$5.8B
Trailing twelve-month free cash flow.
Quarter free cash flow
$71.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$5.9B
Cash generated by operations before capital spending.
CapEx
$5.9B
Capital spending and related asset purchases.
FCF margin
0.5%
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 | $14.3B | $6.1B | $2.8B | $3.3B | 23.0% |
| 2024-08-31 | $13.3B | $7.4B | $2.3B | $5.1B | 38.5% |
| 2024-11-30 | $14.1B | $1.3B | $4.0B | -$2.7B | -19.0% |
| 2025-02-28 | $14.1B | $5.9B | $5.9B | $71.0M | 0.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 2.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 41.5% | Lower capital intensity usually supports FCF margin. |
| Net cash | n/a | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Capital Expenditure Surge
Capital expenditure increased sharply from both the prior quarter and the year-ago period, reaching a level that matched operating cash flow. This was the strongest observable driver of the change in free cash flow, as revenue remained stable and operating cash flow improved.
The elevated capital spending nearly eliminated free cash flow despite solid operating cash generation.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow was nearly equal to capital expenditure, leaving free cash flow minimal and the free cash flow margin near zero. Revenue was stable, so the conversion rate was primarily determined by the unusually high level of capital spending relative to operating cash generation.
Compared to the immediately preceding quarter, operating cash flow was higher, capital expenditure was higher, and free cash flow improved from negative to slightly positive. Versus the same quarter one year earlier, operating cash flow was slightly higher, but capital expenditure was significantly higher, resulting in much lower free cash flow and a much lower free cash flow margin.
Monitor the trajectory of capital expenditure, which equaled operating cash flow this quarter and was the primary factor compressing free cash flow.