Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow improved compared to both the prior quarter and the same quarter last year. Operating cash flow was higher sequentially and year-over-year, while capital expenditure was lower sequentially but comparable year-over-year.
- Revenue declined from the prior quarter but grew year-over-year. Free cash flow margin rose sharply compared to the year-ago quarter and weakened from the prior quarter.
- Compared to the immediately preceding quarter, revenue was lower, operating cash flow and free cash flow were lower, and free cash flow margin weakened. Compared to the same quarter one year earlier, revenue was higher, operating cash flow and free cash flow were higher, and free cash flow margin improved.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$4.8B
Trailing twelve-month free cash flow.
Quarter free cash flow
$832.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$842.0M
Cash generated by operations before capital spending.
CapEx
$10.0M
Capital spending and related asset purchases.
FCF margin
30.7%
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 |
|---|---|---|---|---|---|
| 2022-10-31 | $2.6B | $328.0M | $77.0M | $251.0M | 9.7% |
| 2023-01-31 | $3.0B | $284.0M | $55.0M | $229.0M | 7.5% |
| 2023-04-30 | $6.0B | $3.6B | $88.0M | $3.5B | 58.2% |
| 2023-07-31 | $2.7B | $842.0M | $10.0M | $832.0M | 30.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 934.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.4% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$3.3B | 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
The strongest observable driver this quarter was the increase in operating cash flow compared to the same quarter last year, which directly supported the improvement in free cash flow. This occurred despite a sequential decline in revenue.
Higher operating cash flow drove a significant year-over-year improvement in free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue declined from the prior quarter but grew year-over-year. Free cash flow margin rose sharply compared to the year-ago quarter and weakened from the prior quarter.
Compared to the immediately preceding quarter, revenue was lower, operating cash flow and free cash flow were lower, and free cash flow margin weakened. Compared to the same quarter one year earlier, revenue was higher, operating cash flow and free cash flow were higher, and free cash flow margin improved.
Monitor the trend in revenue relative to operating cash flow conversion, given the divergence in sequential comparison.