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 rise in operating cash flow. Revenue declined slightly from a year ago but operating cash flow improved markedly.
- Operating cash flow substantially exceeded capital expenditure, resulting in a positive free cash flow margin. The conversion from revenue to free cash flow strengthened compared to both the prior quarter and the same quarter last year.
- Compared to the preceding quarter, revenue and operating cash flow both increased, with free cash flow rising accordingly. Versus the same quarter one year earlier, revenue was slightly lower but operating cash flow reversed from negative to positive, leading to a substantial improvement in free cash flow and margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$52.3M
Trailing twelve-month free cash flow.
Quarter free cash flow
$326.6M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$338.2M
Cash generated by operations before capital spending.
CapEx
$11.6M
Capital spending and related asset purchases.
FCF margin
14.7%
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 |
|---|---|---|---|---|---|
| 2022-04-30 | $1.4B | -$303.9M | $10.8M | -$314.7M | -22.8% |
| 2022-07-30 | $1.1B | -$103.4M | $20.5M | -$123.9M | -10.9% |
| 2022-10-29 | $1.2B | $177.3M | $13.0M | $164.3M | 13.8% |
| 2023-01-28 | $2.2B | $338.2M | $11.6M | $326.6M | 14.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 677.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.5% | 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.
Operating cash flow rebound
Operating cash flow turned from a negative level a year ago to a positive figure this quarter, marking a significant reversal. This improvement is the strongest observable factor behind the free cash flow shift.
The positive swing in operating cash flow directly enabled free cash flow to become positive and supported a higher free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow substantially exceeded capital expenditure, resulting in a positive free cash flow margin. The conversion from revenue to free cash flow strengthened compared to both the prior quarter and the same quarter last year.
Compared to the preceding quarter, revenue and operating cash flow both increased, with free cash flow rising accordingly. Versus the same quarter one year earlier, revenue was slightly lower but operating cash flow reversed from negative to positive, leading to a substantial improvement in free cash flow and margin.
Monitor the sustainability of operating cash flow, as it is the primary driver of free cash flow generation this quarter.