Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
The quarter saw a sharp reversal in cash generation, with operating cash flow turning negative and free cash flow also negative. Revenue declined compared to both the prior quarter and the same quarter one year earlier, while capital expenditure increased from the prior quarter but decreased year-over-year.
- The conversion of revenue into cash weakened significantly. Operating cash flow was negative, and after capital expenditure, free cash flow was also negative, resulting in a negative free cash flow margin.
- Compared to the immediately preceding quarter, revenue, operating cash flow, and free cash flow were all lower, and the free cash flow margin turned from positive to negative. Versus the same quarter one year earlier, the same metrics were lower, with operating cash flow and free cash flow shifting from positive to negative.
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
-$208.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
-$16.0M
Cash generated by operations before capital spending.
CapEx
$192.0M
Capital spending and related asset purchases.
FCF margin
-1.5%
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 |
|---|---|---|---|---|---|
| 2022-04-30 | $16.5B | $508.0M | $178.0M | $330.0M | 2.0% |
| 2022-07-31 | $14.6B | $394.0M | $196.0M | $198.0M | 1.4% |
| 2022-10-31 | $14.8B | $1.9B | $118.0M | $1.8B | 12.1% |
| 2023-01-31 | $13.8B | -$16.0M | $192.0M | -$208.0M | -1.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -44.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.4% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$9.4B | 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 Deterioration
Operating cash flow moved from positive in both comparison periods to negative in the current quarter, driving free cash flow into negative territory.
The negative free cash flow margin indicates that the company's operations did not generate sufficient cash to cover capital spending.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
The conversion of revenue into cash weakened significantly. Operating cash flow was negative, and after capital expenditure, free cash flow was also negative, resulting in a negative free cash flow margin.
Compared to the immediately preceding quarter, revenue, operating cash flow, and free cash flow were all lower, and the free cash flow margin turned from positive to negative. Versus the same quarter one year earlier, the same metrics were lower, with operating cash flow and free cash flow shifting from positive to negative.
Monitor whether operating cash flow can return to positive levels in subsequent quarters.