Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow improved sequentially due to lower capital expenditure, despite a decline in operating cash flow. Compared to the same quarter last year, free cash flow weakened as both revenue and operating cash flow decreased.
- Revenue was lower than the prior quarter but operating cash flow also decreased, while capital expenditure dropped sharply, resulting in higher free cash flow and an improved free cash flow margin.
- Compared to the preceding quarter, free cash flow and margin improved as capital expenditure fell. Versus the same quarter last year, free cash flow and margin weakened due to lower revenue and operating cash flow.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$371.5M
Trailing twelve-month free cash flow.
Quarter free cash flow
$160.2M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$229.1M
Cash generated by operations before capital spending.
CapEx
$68.9M
Capital spending and related asset purchases.
FCF margin
4.1%
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 |
|---|---|---|---|---|---|
| 2022-10-31 | $4.0B | $209.9M | $95.3M | $114.6M | 2.9% |
| 2023-01-31 | $3.3B | $150.5M | $124.0M | $26.5M | 0.8% |
| 2023-04-30 | $3.3B | $245.4M | $175.3M | $70.1M | 2.1% |
| 2023-07-31 | $3.9B | $229.1M | $68.9M | $160.2M | 4.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 94.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.8% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$1.2B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Lower Capital Expenditure
Capital expenditure decreased significantly from the prior quarter and was also lower than the same quarter last year, which directly supported free cash flow improvement.
The reduction in capital expenditure was the strongest observable driver of the sequential free cash flow increase.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was lower than the prior quarter but operating cash flow also decreased, while capital expenditure dropped sharply, resulting in higher free cash flow and an improved free cash flow margin.
Compared to the preceding quarter, free cash flow and margin improved as capital expenditure fell. Versus the same quarter last year, free cash flow and margin weakened due to lower revenue and operating cash flow.
Monitor the trend in operating cash flow, which declined both sequentially and year-over-year.