Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was stable versus the prior quarter, while operating cash flow improved significantly, driving a higher free cash flow and margin. Compared to the same quarter last year, revenue was lower and free cash flow declined, though the margin was only slightly lower.
- Operating cash flow as a proportion of revenue improved from the prior quarter, and capital expenditure was lower, resulting in a higher free cash flow and margin. The conversion rate strengthened sequentially but remained below the year-ago level.
- Compared to the prior quarter, revenue was stable, operating cash flow was higher, capital expenditure was lower, and free cash flow and margin improved. Versus the same quarter last year, revenue was lower, operating cash flow and free cash flow were lower, capital expenditure was lower, and the margin was slightly lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$704.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
$516.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$686.0M
Cash generated by operations before capital spending.
CapEx
$170.0M
Capital spending and related asset purchases.
FCF margin
6.1%
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 |
|---|---|---|---|---|---|
| 2022-11-30 | $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% |
| 2023-08-31 | $8.5B | $686.0M | $170.0M | $516.0M | 6.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 332.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.0% | 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 Recovery
Operating cash flow increased substantially from the prior quarter, while capital expenditure declined, leading to a higher free cash flow and margin. This was the strongest observable driver of the quarter's cash conversion improvement.
The higher operating cash flow directly lifted free cash flow and margin, reversing the prior quarter's weaker performance.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a proportion of revenue improved from the prior quarter, and capital expenditure was lower, resulting in a higher free cash flow and margin. The conversion rate strengthened sequentially but remained below the year-ago level.
Compared to the prior quarter, revenue was stable, operating cash flow was higher, capital expenditure was lower, and free cash flow and margin improved. Versus the same quarter last year, revenue was lower, operating cash flow and free cash flow were lower, capital expenditure was lower, and the margin was slightly lower.
Monitor whether the improvement in operating cash flow can be sustained given the sequential increase from the prior quarter.