Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
The quarter's free cash flow was negative and weakened compared to both the prior quarter and the same quarter last year, driven by capital expenditure far exceeding operating cash flow. Revenue was higher sequentially and year-over-year, but the cash conversion was pressured by a substantial increase in capital spending.
- Operating cash flow was positive and higher than the prior quarter, but capital expenditure was significantly larger, producing a negative free cash flow and a weakened free cash flow margin. Revenue grew, yet the cash conversion turned negative from the positive margin a year ago.
- Revenue increased versus both the prior quarter and the same quarter last year. Operating cash flow improved from the prior quarter but was mixed year over year. Capital expenditure rose sequentially and was much higher than a year ago, resulting in a deeper negative free cash flow compared to both periods.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$24.7B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$11.5B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$7.2B
Cash generated by operations before capital spending.
CapEx
$18.6B
Capital spending and related asset purchases.
FCF margin
-66.8%
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 |
|---|---|---|---|---|---|
| 2025-05-31 | $15.9B | $6.2B | $9.1B | -$2.9B | -18.4% |
| 2025-08-31 | $14.9B | $8.1B | $8.5B | -$362.0M | -2.4% |
| 2025-11-30 | $16.1B | $2.1B | $12.0B | -$10.0B | -62.1% |
| 2026-02-28 | $17.2B | $7.2B | $18.6B | -$11.5B | -66.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -308.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 108.4% | 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 substantially compared to both the prior quarter and the year-ago quarter, far exceeding operating cash flow. The filing context notes that cash used for capital expenditures was a significant use of cash alongside financing proceeds.
The elevated capital expenditure is the strongest observable driver of the negative free cash flow and the weakened margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow was positive and higher than the prior quarter, but capital expenditure was significantly larger, producing a negative free cash flow and a weakened free cash flow margin. Revenue grew, yet the cash conversion turned negative from the positive margin a year ago.
Revenue increased versus both the prior quarter and the same quarter last year. Operating cash flow improved from the prior quarter but was mixed year over year. Capital expenditure rose sequentially and was much higher than a year ago, resulting in a deeper negative free cash flow compared to both periods.
Monitor the trajectory of capital expenditure relative to operating cash flow, as the gap is currently the primary factor driving negative free cash flow.