Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Cash conversion strengthened as operating cash flow rose from the prior quarter, lifting free cash flow and margin. Revenue also increased, supporting the improvement.
- Revenue grew compared to both the prior quarter and the same quarter last year. Operating cash flow and free cash flow both improved from the prior quarter, and the free cash flow margin expanded sequentially, though it remained below the year-ago level.
- Sequentially, revenue, operating cash flow, capital expenditure, free cash flow, and free cash flow margin all improved. Versus the same quarter last year, revenue was higher while operating cash flow and free cash flow were slightly higher; capital expenditure was lower and free cash flow margin was slightly lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$9.4B
Trailing twelve-month free cash flow.
Quarter free cash flow
$3.1B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$3.3B
Cash generated by operations before capital spending.
CapEx
$141.5M
Capital spending and related asset purchases.
FCF margin
19.0%
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 |
|---|---|---|---|---|---|
| 2022-08-31 | $15.4B | $3.8B | $177.1M | $3.6B | 23.4% |
| 2022-11-30 | $15.7B | $495.4M | $98.8M | $396.6M | 2.5% |
| 2023-02-28 | $15.8B | $2.3B | $107.5M | $2.2B | 14.1% |
| 2023-05-31 | $16.6B | $3.3B | $141.5M | $3.1B | 19.0% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 156.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.9% | 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
Operating cash flow improved substantially from the prior quarter, and was slightly above the year-ago level. This drove the sequential increase in free cash flow and free cash flow margin.
Higher operating cash flow was the main factor behind the sequential expansion in free cash flow and margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue grew compared to both the prior quarter and the same quarter last year. Operating cash flow and free cash flow both improved from the prior quarter, and the free cash flow margin expanded sequentially, though it remained below the year-ago level.
Sequentially, revenue, operating cash flow, capital expenditure, free cash flow, and free cash flow margin all improved. Versus the same quarter last year, revenue was higher while operating cash flow and free cash flow were slightly higher; capital expenditure was lower and free cash flow margin was slightly lower.
Monitor capital expenditure levels, as they were lower than both the prior quarter and the same quarter last year.