Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned positive this quarter, supported by a significant improvement in operating cash flow despite lower revenue. Capital expenditure decreased from the prior period, contributing to the cash conversion strength.
- Operating cash flow increased sharply from the prior quarter, while capital expenditure was reduced, resulting in a positive free cash flow and a strengthened free cash flow margin. Compared to the same quarter last year, operating cash flow and free cash flow were broadly stable, with a similar margin.
- Compared to the prior quarter, free cash flow improved from negative to positive, driven by higher operating cash flow and lower capital spending. Versus the same quarter a year ago, revenue was lower but free cash flow and margin remained at a similar level.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.1B
Trailing twelve-month free cash flow.
Quarter free cash flow
$998.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$2.3B
Cash generated by operations before capital spending.
CapEx
$1.3B
Capital spending and related asset purchases.
FCF margin
4.5%
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 |
|---|---|---|---|---|---|
| 2022-05-31 | $24.4B | $3.5B | $2.4B | $1.1B | 4.6% |
| 2022-08-31 | $23.2B | $1.6B | $1.3B | $323.0M | 1.4% |
| 2022-11-30 | $22.8B | $1.5B | $1.9B | -$340.0M | -1.5% |
| 2023-02-28 | $22.2B | $2.3B | $1.3B | $998.0M | 4.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 129.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 5.8% | Lower capital intensity usually supports FCF margin. |
| Net cash | n/a | 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 Recovery
Operating cash flow rose substantially from the prior quarter, marking the strongest observable driver behind the swing to positive free cash flow. This improvement occurred even as revenue declined sequentially.
Sustained operating cash flow at this level would support continued positive free cash flow, provided capital expenditure does not increase materially.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow increased sharply from the prior quarter, while capital expenditure was reduced, resulting in a positive free cash flow and a strengthened free cash flow margin. Compared to the same quarter last year, operating cash flow and free cash flow were broadly stable, with a similar margin.
Compared to the prior quarter, free cash flow improved from negative to positive, driven by higher operating cash flow and lower capital spending. Versus the same quarter a year ago, revenue was lower but free cash flow and margin remained at a similar level.
Monitor the ongoing impact of USPS operational restructuring on FedEx Express volumes, as disclosed in the filing, which may further affect revenue and cash flow.