Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue rose from the prior quarter and from the same quarter last year, while operating cash flow was higher sequentially and slightly above the year-ago level. Capital expenditure increased sharply both quarter over quarter and year over year, driving free cash flow deeply negative and free cash flow margin to a large negative figure.
- Revenue was higher than both comparison periods, and operating cash flow improved sequentially but was only slightly above the year-ago quarter. Capital expenditure increased substantially relative to both periods, resulting in free cash flow shifting from positive in the prior quarter and strongly positive a year ago to negative, with free cash flow margin turning from near zero and strongly positive to deeply negative.
- Compared to the immediate prior quarter, revenue and operating cash flow increased, but the rise in capital expenditure outweighed the operating cash flow gain, pulling free cash flow from near breakeven to negative. Versus the same quarter one year earlier, revenue was higher and operating cash flow was slightly higher, but the much larger capital spending reversed a large positive free cash flow into a deficit.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$394.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$2.9B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$6.2B
Cash generated by operations before capital spending.
CapEx
$9.1B
Capital spending and related asset purchases.
FCF margin
-18.4%
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 |
|---|---|---|---|---|---|
| 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% |
| 2025-05-31 | $15.9B | $6.2B | $9.1B | -$2.9B | -18.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -85.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 57.1% | 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 rose significantly from both the prior quarter and the year-ago quarter, exceeding operating cash flow and pulling free cash flow into negative territory. The company's liquidity discussion notes that fiscal year capital expenditures contributed to a reduction in working capital alongside other cash uses such as dividends and debt-related items.
The sharp increase in capital expenditure was the primary observable factor driving the swing from positive to negative free cash flow and the large negative margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher than both comparison periods, and operating cash flow improved sequentially but was only slightly above the year-ago quarter. Capital expenditure increased substantially relative to both periods, resulting in free cash flow shifting from positive in the prior quarter and strongly positive a year ago to negative, with free cash flow margin turning from near zero and strongly positive to deeply negative.
Compared to the immediate prior quarter, revenue and operating cash flow increased, but the rise in capital expenditure outweighed the operating cash flow gain, pulling free cash flow from near breakeven to negative. Versus the same quarter one year earlier, revenue was higher and operating cash flow was slightly higher, but the much larger capital spending reversed a large positive free cash flow into a deficit.
Monitor the trajectory of capital expenditure relative to operating cash flow, given its outsized impact on free cash flow in the current period.