Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
This quarter's free cash flow was deeply negative and significantly weaker than both the prior quarter and the same quarter last year, with the margin turning markedly more negative. Revenue increased, but operating cash flow swung to a much larger negative figure, resulting in a substantial free cash outflow.
- Revenue rose compared with the prior quarter and the year-ago quarter, yet operating cash flow turned from a slight negative to a much deeper negative, while capital expenditure was slightly higher. The combination produced a sharply negative free cash flow and a free cash flow margin that was far more negative than in either comparison period.
- Compared with the immediately preceding quarter, operating cash flow, free cash flow, and free cash flow margin all weakened substantially, while revenue was higher. Versus the same quarter one year earlier, the same measures also weakened, with revenue higher but cash flow metrics more negative.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$474.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$295.7M
Free cash flow in the selected fiscal quarter.
Operating cash flow
-$265.6M
Cash generated by operations before capital spending.
CapEx
$30.0M
Capital spending and related asset purchases.
FCF margin
-28.0%
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 |
|---|---|---|---|---|---|
| 2022-04-30 | $949.2M | $106.6M | $19.4M | $87.1M | 9.2% |
| 2022-07-30 | $868.0M | -$205.4M | $21.7M | -$227.0M | -26.2% |
| 2022-10-29 | $971.0M | -$14.5M | $23.9M | -$38.4M | -4.0% |
| 2023-01-28 | $1.1B | -$265.6M | $30.0M | -$295.7M | -28.0% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -387.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.8% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$504.9M | 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 Deterioration
Revenue increased over both comparison periods, but operating cash flow turned from a modest negative in the prior quarter and a year ago to a much deeper negative this quarter. This swing was the primary factor behind the large free cash flow deficit.
The sharp reversal in operating cash flow drove free cash flow and its margin to their most negative levels among the three quarters shown.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue rose compared with the prior quarter and the year-ago quarter, yet operating cash flow turned from a slight negative to a much deeper negative, while capital expenditure was slightly higher. The combination produced a sharply negative free cash flow and a free cash flow margin that was far more negative than in either comparison period.
Compared with the immediately preceding quarter, operating cash flow, free cash flow, and free cash flow margin all weakened substantially, while revenue was higher. Versus the same quarter one year earlier, the same measures also weakened, with revenue higher but cash flow metrics more negative.
Monitor the trend in working capital requirements, as the filing states that operating cash flow was negative because working capital needs exceeded adjusted net income for the quarter.