Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue rose from the prior quarter, and operating cash flow turned positive, yet free cash flow remained negative due to significant capital expenditure. The free cash flow margin improved compared to the prior quarter but was weaker than the same quarter a year earlier.
- Operating cash flow exceeded revenue, indicating strong conversion of revenue into cash from operations. However, capital expenditure was higher than operating cash flow, resulting in a negative free cash flow margin.
- Compared to the previous quarter, operating cash flow improved from negative to positive, and the free cash flow deficit narrowed. Versus the same quarter a year ago, revenue was lower, and the free cash flow margin was substantially weaker, as capital expenditure increased while operating cash flow was only slightly higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$3.7M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$310099
Free cash flow in the selected fiscal quarter.
Operating cash flow
$159744
Cash generated by operations before capital spending.
CapEx
$469843
Capital spending and related asset purchases.
FCF margin
-198.7%
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 | $16567 | -$397539 | $666265 | -$1.1M | -6421.2% |
| 2022-08-31 | $61828 | -$1.2M | $498495 | -$1.7M | -2706.6% |
| 2022-11-30 | $101716 | -$611904 | $0 | -$611904 | -601.6% |
| 2023-02-28 | $156090 | $159744 | $469843 | -$310099 | -198.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 100.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 301.0% | 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.
Capital Expenditure Increase
Capital expenditure increased substantially from the prior quarter, becoming the primary factor behind the negative free cash flow.
The free cash flow remained negative as capital spending exceeded operating cash generation.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow exceeded revenue, indicating strong conversion of revenue into cash from operations. However, capital expenditure was higher than operating cash flow, resulting in a negative free cash flow margin.
Compared to the previous quarter, operating cash flow improved from negative to positive, and the free cash flow deficit narrowed. Versus the same quarter a year ago, revenue was lower, and the free cash flow margin was substantially weaker, as capital expenditure increased while operating cash flow was only slightly higher.
Monitor the trend of capital expenditure, as it exceeded operating cash flow in the current quarter.