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. Revenue was lower than the prior quarter but higher than the same quarter last year.
- Operating cash flow increased sharply from the prior quarter and the year-ago quarter, while capital expenditure was slightly higher than the prior quarter but lower than the year-ago quarter. The resulting free cash flow margin improved from negative to positive.
- Compared to the immediately preceding quarter, revenue was lower but operating cash flow was higher, leading to a positive free cash flow versus a negative one. Versus the same quarter one year earlier, revenue was higher, operating cash flow was higher, and free cash flow also turned positive from negative.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$713.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
$91.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$414.0M
Cash generated by operations before capital spending.
CapEx
$323.0M
Capital spending and related asset purchases.
FCF margin
1.1%
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 | $8.3B | $545.0M | $364.0M | $181.0M | 2.2% |
| 2022-08-31 | $9.0B | $906.0M | $317.0M | $589.0M | 6.5% |
| 2022-11-30 | $9.6B | $166.0M | $314.0M | -$148.0M | -1.5% |
| 2023-02-28 | $8.1B | $414.0M | $323.0M | $91.0M | 1.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 44.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 4.0% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$1.7B | 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 increased substantially from both the prior quarter and the year-ago quarter, driving the swing from negative to positive free cash flow. This was the strongest observable factor in the quarter's cash conversion.
The improvement in operating cash flow was the primary reason free cash flow turned positive this quarter.
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 and the year-ago quarter, while capital expenditure was slightly higher than the prior quarter but lower than the year-ago quarter. The resulting free cash flow margin improved from negative to positive.
Compared to the immediately preceding quarter, revenue was lower but operating cash flow was higher, leading to a positive free cash flow versus a negative one. Versus the same quarter one year earlier, revenue was higher, operating cash flow was higher, and free cash flow also turned positive from negative.
Monitor whether operating cash flow can sustain its improvement relative to revenue trends in upcoming quarters.