Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Operating cash flow turned positive from a negative position a year earlier, driving a strong free cash flow margin. Revenue was slightly higher than the same quarter last year but lower than the prior quarter.
- Revenue was lower than the prior quarter, yet operating cash flow remained positive and capital expenditure was minimal, resulting in a free cash flow margin that improved compared to the same quarter last year but weakened versus the prior quarter.
- Compared to the prior quarter, revenue and operating cash flow were lower, and the free cash flow margin weakened. Compared to the same quarter one year earlier, revenue was slightly higher, operating cash flow improved from negative to positive, and the free cash flow margin turned positive.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$4.3B
Trailing twelve-month free cash flow.
Quarter free cash flow
$972.8M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$978.2M
Cash generated by operations before capital spending.
CapEx
$5.4M
Capital spending and related asset purchases.
FCF margin
15.0%
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 | $8.4B | $124.8M | $5.1M | $119.8M | 1.4% |
| 2022-08-31 | $8.9B | $498.8M | $16.7M | $482.2M | 5.4% |
| 2022-11-30 | $10.2B | $2.7B | $29.7M | $2.7B | 26.4% |
| 2023-02-28 | $6.5B | $978.2M | $5.4M | $972.8M | 15.0% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 163.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.1% | 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 Turnaround
Operating cash flow shifted from negative in the same quarter last year to positive this quarter, while capital expenditure remained low. This was the strongest observable driver of the free cash flow improvement.
The positive operating cash flow directly enabled a positive free cash flow margin, contrasting with the negative margin a year earlier.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was lower than the prior quarter, yet operating cash flow remained positive and capital expenditure was minimal, resulting in a free cash flow margin that improved compared to the same quarter last year but weakened versus the prior quarter.
Compared to the prior quarter, revenue and operating cash flow were lower, and the free cash flow margin weakened. Compared to the same quarter one year earlier, revenue was slightly higher, operating cash flow improved from negative to positive, and the free cash flow margin turned positive.
Monitor whether operating cash flow can sustain its positive level given the lower revenue compared to the prior quarter.