Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue increased, but operating cash flow turned negative, resulting in negative free cash flow and a negative margin. Compared to the same quarter last year, the free cash flow deficit and margin improved significantly.
- Operating cash flow was negative while revenue rose, indicating that cash conversion lagged behind sales growth. Capital expenditure added to the cash outflow, leaving free cash flow and its margin both negative.
- Operating cash flow weakened from positive in the prior quarter to negative, and free cash flow was more negative. However, compared to the same quarter one year earlier, both operating cash flow and free cash flow were less negative, and the margin improved markedly.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$1.7M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$485502
Free cash flow in the selected fiscal quarter.
Operating cash flow
-$366690
Cash generated by operations before capital spending.
CapEx
$118812
Capital spending and related asset purchases.
FCF margin
-197.9%
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 |
|---|---|---|---|---|---|
| 2022-11-30 | $101716 | -$611904 | $0 | -$611904 | -601.6% |
| 2023-02-28 | $156090 | $159744 | $469843 | -$310099 | -198.7% |
| 2023-05-31 | $142126 | $9135 | $261257 | -$252122 | -177.4% |
| 2023-08-31 | $245346 | -$366690 | $118812 | -$485502 | -197.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 41.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 48.4% | 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.
Reduced Capital Expenditure
Capital expenditure this quarter was lower than both the prior quarter and the same quarter one year earlier. This reduction in cash outflows for equipment purchases was the most observable factor limiting the free cash flow deficit.
Lower capital spending helped contain the free cash flow deficit compared to prior periods.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow was negative while revenue rose, indicating that cash conversion lagged behind sales growth. Capital expenditure added to the cash outflow, leaving free cash flow and its margin both negative.
Operating cash flow weakened from positive in the prior quarter to negative, and free cash flow was more negative. However, compared to the same quarter one year earlier, both operating cash flow and free cash flow were less negative, and the margin improved markedly.
Monitor the company's cash balance and net loss trajectory, as highlighted in the liquidity discussion.