Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow margin weakened sharply from the prior quarter and also declined compared to the same quarter last year. Revenue was lower sequentially but higher year over year, while operating cash flow decreased in both comparisons.
- Operating cash flow as a proportion of revenue declined, and with capital expenditure remaining relatively stable, free cash flow margin contracted. The conversion from revenue to free cash flow was lower than both the immediate prior quarter and the same quarter one year earlier.
- Compared to the prior quarter, revenue, operating cash flow, and free cash flow were all lower, and free cash flow margin weakened. Versus the same quarter last year, revenue was higher but operating cash flow and free cash flow were lower, resulting in a weaker margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.7B
Trailing twelve-month free cash flow.
Quarter free cash flow
$180.4M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$221.7M
Cash generated by operations before capital spending.
CapEx
$41.3M
Capital spending and related asset purchases.
FCF margin
14.4%
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 |
|---|---|---|---|---|---|
| 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% |
| 2024-05-31 | $1.3B | $221.7M | $41.3M | $180.4M | 14.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 47.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.3% | Lower capital intensity usually supports FCF margin. |
| Net cash | $670.3M | 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 Decline
Operating cash flow decreased both sequentially and year over year, while revenue showed a mixed pattern. This decline was the strongest observable factor behind the lower free cash flow and margin.
The reduction in operating cash flow directly compressed free cash flow and margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a proportion of revenue declined, and with capital expenditure remaining relatively stable, free cash flow margin contracted. The conversion from revenue to free cash flow was lower than both the immediate prior quarter and the same quarter one year earlier.
Compared to the prior quarter, revenue, operating cash flow, and free cash flow were all lower, and free cash flow margin weakened. Versus the same quarter last year, revenue was higher but operating cash flow and free cash flow were lower, resulting in a weaker margin.
Monitor the trend in operating cash flow relative to revenue, as its decline drove the weaker free cash flow margin.