Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow improved sharply from the prior quarter and also increased from the same quarter last year, driven by stronger operating cash flow. The free cash flow margin widened compared with both periods.
- Operating cash flow relative to revenue rose markedly, supporting a higher free cash flow conversion. Capital expenditure was stable sequentially but slightly above the year-ago level.
- Compared with the immediately preceding quarter, operating cash flow and free cash flow both improved, and the free cash flow margin increased. Versus the same quarter one year earlier, all key cash flow metrics were higher, with the margin also improving.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.9B
Trailing twelve-month free cash flow.
Quarter free cash flow
$631.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$671.7M
Cash generated by operations before capital spending.
CapEx
$40.7M
Capital spending and related asset purchases.
FCF margin
45.2%
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 | $1.2B | $417.4M | $46.0M | $371.4M | 30.8% |
| 2023-08-31 | $1.3B | $693.0M | $38.7M | $654.3M | 52.2% |
| 2023-11-30 | $1.2B | $311.3M | $40.7M | $270.6M | 22.1% |
| 2024-02-29 | $1.4B | $671.7M | $40.7M | $631.0M | 45.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 126.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.9% | 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 strength
The increase in operating cash flow was the strongest observable driver, significantly outpacing the revenue growth and enabling a large free cash flow gain. This improvement occurred without a corresponding rise in capital expenditure.
The strengthened operating cash flow directly lifted free cash flow and the margin to their highest levels among the periods presented.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow relative to revenue rose markedly, supporting a higher free cash flow conversion. Capital expenditure was stable sequentially but slightly above the year-ago level.
Compared with the immediately preceding quarter, operating cash flow and free cash flow both improved, and the free cash flow margin increased. Versus the same quarter one year earlier, all key cash flow metrics were higher, with the margin also improving.
Capital expenditure, which held steady quarter over quarter but rose versus last year, warrants monitoring for any trend shift.