Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
The company generated positive free cash flow this quarter, a significant improvement from negative free cash flow in both the prior quarter and the same quarter last year. Revenue and operating cash flow were higher than both comparison periods, while capital expenditure was lower than the prior quarter but higher than a year earlier.
- Operating cash flow exceeded revenue, resulting in a positive free cash flow margin after deducting capital expenditure. This marks a shift from the prior quarter when operating cash flow was lower than capital expenditure, and from the year-ago quarter when both revenue and operating cash flow were much lower.
- Compared to the immediately preceding quarter, revenue and operating cash flow were higher, capital expenditure was lower, and free cash flow turned from negative to positive. Versus the same quarter one year earlier, revenue and operating cash flow were higher, capital expenditure was higher, and free cash flow also improved from negative to positive.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$74.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
$256000
Free cash flow in the selected fiscal quarter.
Operating cash flow
$26.2M
Cash generated by operations before capital spending.
CapEx
$25.9M
Capital spending and related asset purchases.
FCF margin
1.8%
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 |
|---|---|---|---|---|---|
| 2022-05-31 | $7.5M | -$5.1M | $26.8M | -$31.9M | -424.0% |
| 2022-08-31 | $6.9M | $17.3M | $31.7M | -$14.4M | -207.7% |
| 2022-11-30 | $12.3M | $10.7M | $38.6M | -$27.9M | -226.5% |
| 2023-02-28 | $14.1M | $26.2M | $25.9M | $256000 | 1.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -3.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 183.9% | 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 Improvement
Operating cash flow increased substantially compared to both the prior quarter and the year-ago quarter, enabling the company to cover capital expenditure and achieve positive free cash flow.
This improvement in operating cash flow was the primary factor behind the shift to positive free cash flow this quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow exceeded revenue, resulting in a positive free cash flow margin after deducting capital expenditure. This marks a shift from the prior quarter when operating cash flow was lower than capital expenditure, and from the year-ago quarter when both revenue and operating cash flow were much lower.
Compared to the immediately preceding quarter, revenue and operating cash flow were higher, capital expenditure was lower, and free cash flow turned from negative to positive. Versus the same quarter one year earlier, revenue and operating cash flow were higher, capital expenditure was higher, and free cash flow also improved from negative to positive.
Monitor the level of capital expenditure relative to operating cash flow, as it remains a significant cash outflow.