Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Operating cash flow remained stable versus the prior quarter, while capital expenditure rose materially, causing free cash flow to decline and the margin to narrow. Compared to the same quarter last year, all cash flow metrics improved significantly, reflecting stronger operational performance.
- Revenue conversion to operating cash flow held steady versus the prior quarter, but higher capital spending reduced the proportion of cash retained as free cash flow. The free cash flow margin, though lower than the preceding quarter, remained well above the level of one year earlier.
- Compared with the preceding quarter, free cash flow and its margin weakened due to a substantial increase in capital expenditure. Relative to the same quarter last year, operating cash flow, free cash flow, and margin all improved markedly, with revenue also higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$633.5M
Trailing twelve-month free cash flow.
Quarter free cash flow
$138.7M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$155.1M
Cash generated by operations before capital spending.
CapEx
$16.5M
Capital spending and related asset purchases.
FCF margin
25.6%
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 |
|---|---|---|---|---|---|
| 2023-02-28 | $515.1M | $164.7M | $17.5M | $147.2M | 28.6% |
| 2023-05-31 | $529.8M | $218.6M | $26.0M | $192.6M | 36.3% |
| 2023-08-31 | $535.8M | $155.7M | $635000 | $155.0M | 28.9% |
| 2023-11-30 | $542.2M | $155.1M | $16.5M | $138.7M | 25.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 93.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.0% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$1.1B | 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 shift
Capital spending increased sharply from the previous quarter, more than offsetting the stable operating cash flow and causing free cash flow to decline. The year-over-year comparison, however, shows a slight decrease in capital expenditure from a year ago.
If capital expenditure remains elevated, it may continue to constrain free cash flow margins relative to operating cash flow.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue conversion to operating cash flow held steady versus the prior quarter, but higher capital spending reduced the proportion of cash retained as free cash flow. The free cash flow margin, though lower than the preceding quarter, remained well above the level of one year earlier.
Compared with the preceding quarter, free cash flow and its margin weakened due to a substantial increase in capital expenditure. Relative to the same quarter last year, operating cash flow, free cash flow, and margin all improved markedly, with revenue also higher.
The elevated capital expenditure level should be monitored for its impact on future free cash flow generation.