Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was stable versus the prior quarter and higher versus the same quarter a year earlier, while operating cash flow and free cash flow improved sharply versus the prior quarter and were higher than a year ago. The free cash flow margin strengthened compared with both the prior quarter and the year-ago quarter.
- Cash conversion was strong, as operating cash flow far exceeded the revenue level, translating into a high free cash flow margin after minimal capital expenditure.
- Compared with the prior quarter, operating cash flow and free cash flow were both significantly higher, and free cash flow margin improved. Versus the same quarter a year earlier, all cash flow metrics were higher and the margin was improved.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.0B
Trailing twelve-month free cash flow.
Quarter free cash flow
$903.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$911.0M
Cash generated by operations before capital spending.
CapEx
$8.0M
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 |
|---|---|---|---|---|---|
| 2022-04-30 | $1.2B | $434.0M | $12.0M | $422.0M | 36.1% |
| 2022-07-31 | $1.2B | $257.0M | $11.0M | $246.0M | 19.9% |
| 2022-10-31 | $1.3B | $469.0M | $9.0M | $460.0M | 35.9% |
| 2023-01-31 | $1.3B | $911.0M | $8.0M | $903.0M | 68.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 308.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.6% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$353.0M | 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 was substantially higher than in the prior quarter and also above the year-ago level. This improvement, combined with low capital expenditure, drove free cash flow to a high level.
The elevated operating cash flow was the strongest observable driver of the quarter's free cash flow performance.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Cash conversion was strong, as operating cash flow far exceeded the revenue level, translating into a high free cash flow margin after minimal capital expenditure.
Compared with the prior quarter, operating cash flow and free cash flow were both significantly higher, and free cash flow margin improved. Versus the same quarter a year earlier, all cash flow metrics were higher and the margin was improved.
Monitor the transition to annual billings for multi-year contracts, as it may affect the timing of cash collections and billings.