Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow margin remained broadly stable year over year as stronger operating cash flow offset a rise in capital spending. Sequentially, cash conversion improved significantly as operating cash flow growth outpaced revenue expansion.
- Revenue increased while operating cash flow grew at a faster pace, resulting in a higher free cash flow margin. Capital expenditure rose, but the improvement in operating cash flow more than compensated, lifting free cash flow.
- Compared to the prior quarter, all key cash flow metrics improved and the margin strengthened. Versus the same quarter last year, revenue and operating cash flow were higher; free cash flow also increased while the margin remained essentially stable despite higher capital spending.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$564.6M
Trailing twelve-month free cash flow.
Quarter free cash flow
$192.6M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$218.6M
Cash generated by operations before capital spending.
CapEx
$26.0M
Capital spending and related asset purchases.
FCF margin
36.3%
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 |
|---|---|---|---|---|---|
| 2022-08-31 | $499.3M | $151.4M | $15.2M | $136.1M | 27.3% |
| 2022-11-30 | $504.8M | $106.6M | $18.0M | $88.7M | 17.6% |
| 2023-02-28 | $515.1M | $164.7M | $17.5M | $147.2M | 28.6% |
| 2023-05-31 | $529.8M | $218.6M | $26.0M | $192.6M | 36.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 143.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 4.9% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$1.2B | 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 Growth
Operating cash flow increased notably from the prior quarter and also rose relative to the year-ago period, outpacing the growth in revenue and capital expenditure. This was the primary observable factor behind the improvement in free cash flow.
Stronger operating cash flow directly lifted free cash flow and supported a higher conversion margin despite increased capital outlays.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased while operating cash flow grew at a faster pace, resulting in a higher free cash flow margin. Capital expenditure rose, but the improvement in operating cash flow more than compensated, lifting free cash flow.
Compared to the prior quarter, all key cash flow metrics improved and the margin strengthened. Versus the same quarter last year, revenue and operating cash flow were higher; free cash flow also increased while the margin remained essentially stable despite higher capital spending.
Monitor capital expenditure trends as they have increased both sequentially and year over year, which could affect future free cash flow conversion.