Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
This quarter's free cash flow margin improved compared to both the prior quarter and the same period a year earlier, driven by higher operating cash flow on stable revenue. The increase in operating cash flow was the strongest factor.
- With revenue unchanged, operating cash flow rose, while capital expenditure was slightly lower than the prior quarter, resulting in higher free cash flow and an improved margin.
- Sequentially and year-over-year, operating cash flow and free cash flow were higher, while capital expenditure was stable compared to a year ago and slightly lower than the previous quarter. The free cash flow margin strengthened.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.2B
Trailing twelve-month free cash flow.
Quarter free cash flow
$370.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$423.0M
Cash generated by operations before capital spending.
CapEx
$53.0M
Capital spending and related asset purchases.
FCF margin
26.6%
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 |
|---|---|---|---|---|---|
| 2022-07-31 | $1.4B | $224.0M | $32.0M | $192.0M | 14.0% |
| 2022-10-31 | $1.4B | $398.0M | $58.0M | $340.0M | 23.6% |
| 2023-01-31 | $1.4B | $366.0M | $60.0M | $306.0M | 22.2% |
| 2023-04-30 | $1.4B | $423.0M | $53.0M | $370.0M | 26.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 130.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.8% | Lower capital intensity usually supports FCF margin. |
| Net cash | n/a | 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
Operating cash flow increased from the prior quarter and from the same quarter last year, while revenue was stable. This was the primary driver of free cash flow improvement.
The higher operating cash flow directly boosted free cash flow and margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
With revenue unchanged, operating cash flow rose, while capital expenditure was slightly lower than the prior quarter, resulting in higher free cash flow and an improved margin.
Sequentially and year-over-year, operating cash flow and free cash flow were higher, while capital expenditure was stable compared to a year ago and slightly lower than the previous quarter. The free cash flow margin strengthened.
Monitor whether operating cash flow can sustain its growth given that revenue remained flat.