Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow improved sharply from the prior quarter, driven by higher operating cash flow and lower capital spending. Compared to the same quarter last year, free cash flow was higher despite a decline in operating cash flow, as capital expenditure fell more significantly.
- Revenue increased while operating cash flow rose, and capital expenditure declined, resulting in a higher free cash flow and an improved 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 immediately preceding quarter, free cash flow and margin improved significantly as operating cash flow increased and capital expenditure decreased. Versus the same quarter one year earlier, free cash flow was higher and margin improved, even though operating cash flow was lower, due to a larger reduction in capital spending.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$777.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
$245.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$468.0M
Cash generated by operations before capital spending.
CapEx
$223.0M
Capital spending and related asset purchases.
FCF margin
2.9%
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 |
|---|---|---|---|---|---|
| 2022-08-31 | $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% |
| 2023-05-31 | $8.5B | $468.0M | $223.0M | $245.0M | 2.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 105.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.6% | 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.
Capital Expenditure Reduction
Capital expenditure declined from both the prior quarter and the same quarter last year, contributing to a higher free cash flow despite a mixed operating cash flow performance.
The lower capital spending was the strongest observable driver of the improved free cash flow and margin this quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased while operating cash flow rose, and capital expenditure declined, resulting in a higher free cash flow and an improved 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 immediately preceding quarter, free cash flow and margin improved significantly as operating cash flow increased and capital expenditure decreased. Versus the same quarter one year earlier, free cash flow was higher and margin improved, even though operating cash flow was lower, due to a larger reduction in capital spending.
Monitor the trend in capital expenditure, as its reduction was the primary factor behind the free cash flow improvement relative to the prior year.