Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was essentially stable versus the prior quarter and higher year over year. Free cash flow weakened sequentially but was broadly in line with the same quarter last year, reflecting a lower operating cash flow conversion rate.
- Operating cash flow as a share of revenue decreased compared to both the prior quarter and the year-ago quarter, leading to a lower free cash flow margin despite capital expenditure being relatively stable sequentially.
- Compared to the immediately preceding quarter, operating cash flow and free cash flow were lower while revenue held steady. Versus the same quarter one year earlier, revenue was higher and free cash flow was broadly comparable, with operating cash flow showing improvement.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.3B
Trailing twelve-month free cash flow.
Quarter free cash flow
$230.2M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$336.9M
Cash generated by operations before capital spending.
CapEx
$106.7M
Capital spending and related asset purchases.
FCF margin
9.8%
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 |
|---|---|---|---|---|---|
| 2022-11-30 | $2.2B | $321.0M | $76.4M | $244.6M | 11.2% |
| 2023-02-28 | $2.2B | $425.0M | $77.7M | $347.3M | 15.9% |
| 2023-05-31 | $2.3B | $542.0M | $107.0M | $435.0M | 19.0% |
| 2023-08-31 | $2.3B | $336.9M | $106.7M | $230.2M | 9.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 59.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 4.6% | 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.
Operating cash flow conversion rate
Operating cash flow declined notably from the prior quarter despite revenue being essentially unchanged, resulting in a weaker free cash flow margin. The year-over-year comparison showed a smaller gap, but the sequential drop was the strongest observable shift.
This weakened cash conversion is the primary reason free cash flow dropped from the prior quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a share of revenue decreased compared to both the prior quarter and the year-ago quarter, leading to a lower free cash flow margin despite capital expenditure being relatively stable sequentially.
Compared to the immediately preceding quarter, operating cash flow and free cash flow were lower while revenue held steady. Versus the same quarter one year earlier, revenue was higher and free cash flow was broadly comparable, with operating cash flow showing improvement.
Monitor the trajectory of operating cash flow relative to revenue, as its margin weakened meaningfully from the prior quarter.