Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue improved from both the preceding quarter and the same quarter last year. Operating cash flow and free cash flow strengthened significantly compared to both prior periods, resulting in a substantially higher free cash flow margin.
- With revenue higher, operating cash flow grew substantially, supporting a large free cash flow after capital expenditure. The free cash flow margin widened markedly compared to both the prior quarter and the year-ago quarter, indicating stronger cash generation efficiency relative to revenue.
- Compared to the immediately preceding quarter, operating cash flow converted from a very low level to a positive figure, and free cash flow turned from negative to positive with a much higher margin. Versus the same quarter one year earlier, both operating cash flow and free cash flow were higher, while capital expenditure was lower, contributing to improved free cash flow.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$12.3B
Trailing twelve-month free cash flow.
Quarter free cash flow
$3.8B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$5.5B
Cash generated by operations before capital spending.
CapEx
$1.7B
Capital spending and related asset purchases.
FCF margin
28.6%
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 |
|---|---|---|---|---|---|
| 2023-05-31 | $13.8B | $5.6B | $1.9B | $3.7B | 27.0% |
| 2023-08-31 | $12.5B | $7.0B | $1.3B | $5.7B | 45.5% |
| 2023-11-30 | $12.9B | $143.0M | $1.1B | -$937.0M | -7.2% |
| 2024-02-29 | $13.3B | $5.5B | $1.7B | $3.8B | 28.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 158.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 12.6% | 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.
Stronger Operating Cash Flow
Operating cash flow increased significantly from both the preceding quarter and the year-ago quarter, providing the primary support for the higher free cash flow. This improvement occurred alongside higher revenue and lower capital expenditure compared to last year.
The stronger operating cash flow drove free cash flow and margin to substantially higher levels.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
With revenue higher, operating cash flow grew substantially, supporting a large free cash flow after capital expenditure. The free cash flow margin widened markedly compared to both the prior quarter and the year-ago quarter, indicating stronger cash generation efficiency relative to revenue.
Compared to the immediately preceding quarter, operating cash flow converted from a very low level to a positive figure, and free cash flow turned from negative to positive with a much higher margin. Versus the same quarter one year earlier, both operating cash flow and free cash flow were higher, while capital expenditure was lower, contributing to improved free cash flow.
Monitor the level of capital expenditure relative to operating cash flow, as it decreased from last year but increased sequentially.