Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned negative this quarter as capital expenditure exceeded operating cash flow. Revenue was stable versus a year ago but lower than the prior quarter.
- Operating cash flow was lower than revenue, resulting in a negative free cash flow margin. Capital expenditure was higher than operating cash flow, driving the cash conversion shortfall.
- Compared to the prior quarter, operating cash flow and free cash flow both weakened, while capital expenditure increased. Versus the same quarter last year, operating cash flow and free cash flow were lower, though capital expenditure was higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$349.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$27.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$122.8M
Cash generated by operations before capital spending.
CapEx
$149.8M
Capital spending and related asset purchases.
FCF margin
-0.8%
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 |
|---|---|---|---|---|---|
| 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% |
| 2023-10-31 | $4.1B | $252.6M | $107.1M | $145.6M | 3.6% |
| 2024-01-31 | $3.3B | $122.8M | $149.8M | -$27.0M | -0.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -31.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 4.5% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$1.5B | 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 outpacing operating cash flow
Capital expenditure was higher than operating cash flow this quarter, reversing the prior quarter's pattern where operating cash flow comfortably covered spending. The filing notes increased acquisition-related activity and share repurchases contributed to a lower cash balance.
This shift caused free cash flow to turn negative, compared to positive free cash flow in both the prior quarter and the year-ago quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow was lower than revenue, resulting in a negative free cash flow margin. Capital expenditure was higher than operating cash flow, driving the cash conversion shortfall.
Compared to the prior quarter, operating cash flow and free cash flow both weakened, while capital expenditure increased. Versus the same quarter last year, operating cash flow and free cash flow were lower, though capital expenditure was higher.
Monitor the relationship between capital expenditure and operating cash flow, as elevated spending relative to cash generation led to negative free cash flow.