Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue increased from the prior quarter and from a year ago. However, operating cash flow and free cash flow fell sharply versus the prior quarter and were below the year-ago level, resulting in a much lower free cash flow margin.
- Conversion from revenue to operating cash flow was lower compared to both the prior quarter and the year-ago quarter, as operating cash flow declined relative to revenue. After deducting capital expenditure, free cash flow was a much smaller portion of revenue than in the immediate preceding quarter.
- Compared to the immediately preceding quarter, revenue was higher but all cash flow metrics were significantly lower, with free cash flow margin weakening from a high level. Versus the same quarter one year earlier, revenue improved while operating cash flow, free cash flow, and margin were all lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$5.7B
Trailing twelve-month free cash flow.
Quarter free cash flow
$131.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$334.0M
Cash generated by operations before capital spending.
CapEx
$203.0M
Capital spending and related asset purchases.
FCF margin
1.7%
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 |
|---|---|---|---|---|---|
| 2021-10-31 | $6.9B | $404.0M | $166.0M | $238.0M | 3.5% |
| 2022-01-31 | $7.3B | $2.0B | $167.0M | $1.8B | 24.8% |
| 2022-04-30 | $7.4B | $3.7B | $179.0M | $3.5B | 47.2% |
| 2022-07-31 | $7.7B | $334.0M | $203.0M | $131.0M | 1.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 192.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.6% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$3.7B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Cash Flow Volatility
Operating cash flow fell substantially from the prior quarter, while capital expenditure increased slightly. The resulting free cash flow was lower than both comparison periods despite higher revenue.
The sharp change in cash flow conversion rate is the strongest observable driver behind the weakened free cash flow margin this quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Conversion from revenue to operating cash flow was lower compared to both the prior quarter and the year-ago quarter, as operating cash flow declined relative to revenue. After deducting capital expenditure, free cash flow was a much smaller portion of revenue than in the immediate preceding quarter.
Compared to the immediately preceding quarter, revenue was higher but all cash flow metrics were significantly lower, with free cash flow margin weakening from a high level. Versus the same quarter one year earlier, revenue improved while operating cash flow, free cash flow, and margin were all lower.
Monitor the relationship between revenue growth and operating cash flow, given the divergence this quarter compared to both the prior and year-ago periods.