Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue decreased slightly from the prior quarter but remained significantly higher than the same quarter last year. Free cash flow was negative, though the margin improved markedly compared to both the prior quarter and the year-ago quarter.
- Operating cash flow turned positive this quarter, a sharp improvement from the large negative figure a year ago, but capital expenditure remained substantial, resulting in negative free cash flow. The free cash flow margin, while still negative, improved dramatically from the year-ago quarter and also improved from the prior quarter.
- Compared to the prior quarter, revenue was slightly lower, operating cash flow weakened from a positive figure to a much smaller positive figure, and capital expenditure decreased, leading to a smaller free cash flow deficit and an improved margin. Compared to the same quarter last year, revenue was much higher, operating cash flow improved from deeply negative to positive, capital expenditure was lower, and free cash flow deficit narrowed substantially with a much improved margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$2.8M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$252122
Free cash flow in the selected fiscal quarter.
Operating cash flow
$9135
Cash generated by operations before capital spending.
CapEx
$261257
Capital spending and related asset purchases.
FCF margin
-177.4%
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 | $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% |
| 2023-05-31 | $142126 | $9135 | $261257 | -$252122 | -177.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 48.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 183.8% | 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 Turned Positive
Operating cash flow shifted from a large negative amount a year ago to a positive figure this quarter, a notable improvement. This change occurred alongside a substantial increase in revenue compared to the same quarter last year.
The positive operating cash flow reduced the free cash flow deficit and contributed to the improved free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow turned positive this quarter, a sharp improvement from the large negative figure a year ago, but capital expenditure remained substantial, resulting in negative free cash flow. The free cash flow margin, while still negative, improved dramatically from the year-ago quarter and also improved from the prior quarter.
Compared to the prior quarter, revenue was slightly lower, operating cash flow weakened from a positive figure to a much smaller positive figure, and capital expenditure decreased, leading to a smaller free cash flow deficit and an improved margin. Compared to the same quarter last year, revenue was much higher, operating cash flow improved from deeply negative to positive, capital expenditure was lower, and free cash flow deficit narrowed substantially with a much improved margin.
Monitor whether operating cash flow can sustain its positive trajectory given the prior quarter's larger positive figure and the year-ago quarter's deep negative.