Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Cash generation improved sequentially as free cash flow rose, though it remained below the year-ago level. The gap between operating cash flow and capital expenditure widened less than in the prior period.
- Revenue was higher than both the immediately preceding quarter and the prior-year period. Operating cash flow increased from the preceding quarter but was nearly unchanged from a year earlier. Capital expenditure was lower sequentially but higher year over year. Consequently, free cash flow and free cash flow margin improved from the prior quarter but weakened compared with the same quarter one year earlier.
- Compared with the preceding quarter, free cash flow and free cash flow margin improved as operating cash flow rose and capital expenditure fell. Relative to the prior-year quarter, free cash flow and free cash flow margin declined, with capital expenditure higher than in that period.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$425.1M
Trailing twelve-month free cash flow.
Quarter free cash flow
$83.6M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$166.6M
Cash generated by operations before capital spending.
CapEx
$83.0M
Capital spending and related asset purchases.
FCF margin
9.7%
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 | $829.8M | $131.8M | $43.4M | $88.4M | 10.7% |
| 2022-07-31 | $843.4M | $263.9M | $46.6M | $217.3M | 25.8% |
| 2022-10-31 | $848.1M | $130.7M | $94.9M | $35.8M | 4.2% |
| 2023-01-31 | $858.5M | $166.6M | $83.0M | $83.6M | 9.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 98.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 9.7% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$2.6B | 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 improvement
Operating cash flow increased from the preceding quarter, contributing to a higher free cash flow despite the still-substantial capital expenditure. This sequential improvement was the most notable observable factor.
The stronger operating cash flow narrowed the gap between operating cash flow and capital expenditure, supporting free cash flow growth.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher than both the immediately preceding quarter and the prior-year period. Operating cash flow increased from the preceding quarter but was nearly unchanged from a year earlier. Capital expenditure was lower sequentially but higher year over year. Consequently, free cash flow and free cash flow margin improved from the prior quarter but weakened compared with the same quarter one year earlier.
Compared with the preceding quarter, free cash flow and free cash flow margin improved as operating cash flow rose and capital expenditure fell. Relative to the prior-year quarter, free cash flow and free cash flow margin declined, with capital expenditure higher than in that period.
Monitor the trend in capital expenditure relative to operating cash flow, as this gap is a key determinant of free cash flow variability.