Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was slightly lower than the prior quarter but higher than the same quarter last year. Free cash flow and free cash flow margin weakened compared to both periods, primarily due to a substantial increase in capital expenditure.
- Operating cash flow improved relative to both the prior quarter and the year-ago quarter. However, the conversion to free cash flow was constrained by higher capital expenditure, resulting in a lower free cash flow margin.
- Compared to the immediately preceding quarter, revenue was marginally lower while operating cash flow was higher, but free cash flow declined. Versus the same quarter one year earlier, revenue and operating cash flow were higher, yet free cash flow was lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$215.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
$29.2M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$174.2M
Cash generated by operations before capital spending.
CapEx
$145.0M
Capital spending and related asset purchases.
FCF margin
3.1%
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 |
|---|---|---|---|---|---|
| 2023-01-31 | $858.5M | $166.6M | $83.0M | $83.6M | 9.7% |
| 2023-04-30 | $877.4M | $124.2M | $73.6M | $50.6M | 5.8% |
| 2023-07-31 | $930.2M | $142.5M | $90.9M | $51.6M | 5.5% |
| 2023-10-31 | $927.1M | $174.2M | $145.0M | $29.2M | 3.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 34.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 15.6% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$2.4B | 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 Increase
Capital expenditure rose markedly compared to both the prior quarter and the year-ago quarter, outpacing the improvement in operating cash flow.
This higher capital expenditure was the primary factor behind the decline in free cash flow and free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow improved relative to both the prior quarter and the year-ago quarter. However, the conversion to free cash flow was constrained by higher capital expenditure, resulting in a lower free cash flow margin.
Compared to the immediately preceding quarter, revenue was marginally lower while operating cash flow was higher, but free cash flow declined. Versus the same quarter one year earlier, revenue and operating cash flow were higher, yet free cash flow was lower.
Monitor the trend of capital expenditure relative to operating cash flow, as it significantly influenced free cash flow in the current quarter.