Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue increased, operating cash flow remained positive but declined from the prior quarter, and capital expenditure rose, resulting in negative free cash flow. Compared to the same quarter last year, revenue and operating cash flow improved, and free cash flow was less negative.
- Revenue was higher than the prior quarter, but operating cash flow was lower, indicating a weaker conversion of revenue into cash. Capital expenditure exceeded operating cash flow, leading to negative free cash flow and a negative margin.
- Relative to the immediately preceding quarter, free cash flow turned from positive to negative as operating cash flow decreased and capital expenditure increased. Compared to the same quarter one year earlier, free cash flow improved as both revenue and operating cash flow turned positive, though capital expenditure remained elevated.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$72.5M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$30.5M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$4.6M
Cash generated by operations before capital spending.
CapEx
$35.1M
Capital spending and related asset purchases.
FCF margin
-138.3%
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 |
|---|---|---|---|---|---|
| 2022-08-31 | $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% |
| 2023-05-31 | $22.0M | $4.6M | $35.1M | -$30.5M | -138.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 410.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 159.1% | 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.
Lower Operating Cash Flow
Operating cash flow, while positive, was significantly lower than the prior quarter, reducing the cash available to fund capital expenditure. This decline was the primary factor behind the swing to negative free cash flow.
The weaker cash generation from operations directly contributed to the negative free cash flow and negative margin this quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher than the prior quarter, but operating cash flow was lower, indicating a weaker conversion of revenue into cash. Capital expenditure exceeded operating cash flow, leading to negative free cash flow and a negative margin.
Relative to the immediately preceding quarter, free cash flow turned from positive to negative as operating cash flow decreased and capital expenditure increased. Compared to the same quarter one year earlier, free cash flow improved as both revenue and operating cash flow turned positive, though capital expenditure remained elevated.
Monitor the trend of capital expenditure relative to operating cash flow, as it has become a significant cash outflow this quarter.