Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow and operating cash flow both improved sharply from the prior quarter, matching the year-ago level, while revenue was higher than both comparable periods. The free cash flow margin widened significantly from the prior quarter but narrowed compared to the same quarter last year.
- Operating cash flow rose substantially from the prior quarter and held steady year over year, while capital expenditure was slightly lower. This led to a large sequential increase in free cash flow and a stable year-over-year free cash flow amount, with the margin following the same pattern.
- Compared to the prior quarter, all cash flow metrics improved: operating cash flow, free cash flow, and margin were all higher. Versus the same quarter a year ago, revenue was higher but operating cash flow and free cash flow were similar, resulting in a lower free cash flow margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$3.1B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.5B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.5B
Cash generated by operations before capital spending.
CapEx
$44.0M
Capital spending and related asset purchases.
FCF margin
68.5%
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 |
|---|---|---|---|---|---|
| 2024-01-31 | $2.0B | $690.0M | $35.2M | $654.8M | 33.2% |
| 2024-04-30 | $2.0B | $528.9M | $37.4M | $491.5M | 24.8% |
| 2024-07-31 | $2.2B | $512.7M | $47.4M | $465.3M | 21.3% |
| 2024-10-31 | $2.1B | $1.5B | $44.0M | $1.5B | 68.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 417.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.1% | 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.
Operating Cash Flow Surge
The strongest observable driver was the sharp sequential rise in operating cash flow, which propelled free cash flow higher even as revenue was slightly lower than the prior quarter. This shift was the primary factor behind the significant margin expansion.
The surge in operating cash flow directly lifted free cash flow and margin, reversing the prior quarter's lower levels.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow rose substantially from the prior quarter and held steady year over year, while capital expenditure was slightly lower. This led to a large sequential increase in free cash flow and a stable year-over-year free cash flow amount, with the margin following the same pattern.
Compared to the prior quarter, all cash flow metrics improved: operating cash flow, free cash flow, and margin were all higher. Versus the same quarter a year ago, revenue was higher but operating cash flow and free cash flow were similar, resulting in a lower free cash flow margin.
Monitor whether the free cash flow margin can sustain near the current level given the sequential improvement and the year-over-year decline.