Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
The company generated positive free cash flow driven by higher operating cash flow and lower capital expenditure compared to the prior quarter. This marks a significant improvement from the negative free cash flow margins a year earlier.
- Revenue increased while operating cash flow rose substantially, converting a higher share of revenue into cash. Combined with a reduction in capital expenditure, free cash flow and its margin turned positive.
- Relative to the preceding quarter, free cash flow improved from negative to positive, driven by higher operating cash flow and lower capital expenditure. Compared to the same quarter one year earlier, revenue was higher and operating cash flow shifted from near zero to a substantial positive figure, resulting in a positive free cash flow margin versus a deeply negative one.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$2.4B
Trailing twelve-month free cash flow.
Quarter free cash flow
$440.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.1B
Cash generated by operations before capital spending.
CapEx
$697.0M
Capital spending and related asset purchases.
FCF margin
9.0%
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 | $4.3B | -$344.0M | $538.0M | -$882.0M | -20.5% |
| 2022-11-30 | $3.8B | -$117.0M | $1.2B | -$1.3B | -33.8% |
| 2023-02-28 | $4.4B | $388.0M | $1.1B | -$687.0M | -15.5% |
| 2023-05-31 | $4.9B | $1.1B | $697.0M | $440.0M | 9.0% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -108.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 14.2% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$30.0B | 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 Recovery
Operating cash flow increased materially from both the prior quarter and the year-ago quarter, coinciding with higher revenue. This was the primary observable factor behind the swing to positive free cash flow.
The improvement in operating cash flow was the strongest driver enabling the transition to positive free cash flow.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased while operating cash flow rose substantially, converting a higher share of revenue into cash. Combined with a reduction in capital expenditure, free cash flow and its margin turned positive.
Relative to the preceding quarter, free cash flow improved from negative to positive, driven by higher operating cash flow and lower capital expenditure. Compared to the same quarter one year earlier, revenue was higher and operating cash flow shifted from near zero to a substantial positive figure, resulting in a positive free cash flow margin versus a deeply negative one.
Monitor the trend in capital expenditure, which declined sequentially but remained higher than the year-ago quarter.