Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was stable sequentially while operating cash flow and free cash flow declined, resulting in a lower free cash flow margin. Compared to the same quarter last year, cash flow generation improved significantly on higher revenue.
- Operating cash flow as a percentage of revenue weakened from the prior quarter, as revenue held steady but cash conversion decreased. Capital expenditure remained minimal, so the change in free cash flow mirrored the operating cash flow movement.
- Compared to the immediately preceding quarter, both operating cash flow and free cash flow were lower, and free cash flow margin contracted. Relative to the same quarter one year earlier, all cash flow metrics were higher and the margin improved.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.3B
Trailing twelve-month free cash flow.
Quarter free cash flow
$714.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$723.0M
Cash generated by operations before capital spending.
CapEx
$9.0M
Capital spending and related asset purchases.
FCF margin
56.3%
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 |
|---|---|---|---|---|---|
| 2022-07-31 | $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% |
| 2023-04-30 | $1.3B | $723.0M | $9.0M | $714.0M | 56.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 443.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.7% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$391.0M | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Year-over-year cash generation growth
Operating cash flow and free cash flow were each higher versus the same quarter last year, supported by higher revenue. The free cash flow margin also improved over that period.
This year-over-year improvement in cash conversion strengthened the company's liquidity position relative to the prior year period.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a percentage of revenue weakened from the prior quarter, as revenue held steady but cash conversion decreased. Capital expenditure remained minimal, so the change in free cash flow mirrored the operating cash flow movement.
Compared to the immediately preceding quarter, both operating cash flow and free cash flow were lower, and free cash flow margin contracted. Relative to the same quarter one year earlier, all cash flow metrics were higher and the margin improved.
Monitor the trend in operating cash flow, as it declined from the prior quarter despite stable revenue.