Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow for the quarter was higher than the same period last year but lower than the prior quarter. The free cash flow margin improved year-over-year while weakening sequentially.
- Revenue increased from the prior quarter but decreased from a year ago. Operating cash flow was substantially higher than the prior year, though it declined from the previous quarter. Capital expenditure was higher in both comparisons. Consequently, free cash flow and its margin showed a mixed performance: improved versus the prior year but weakened versus the prior quarter.
- Compared to the immediately preceding quarter, revenue was higher but operating cash flow and free cash flow were lower, resulting in a lower free cash flow margin. Compared to the same quarter one year earlier, revenue was slightly lower while operating cash flow and free cash flow were significantly higher, leading to a higher free cash flow margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$4.8B
Trailing twelve-month free cash flow.
Quarter free cash flow
$634.6M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$660.5M
Cash generated by operations before capital spending.
CapEx
$25.8M
Capital spending and related asset purchases.
FCF margin
7.9%
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 | $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% |
| 2023-05-31 | $8.0B | $660.5M | $25.8M | $634.6M | 7.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 72.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.3% | 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.
Year-over-year operating cash flow improvement
Operating cash flow was substantially higher than the same quarter last year, more than offsetting the increase in capital expenditure and driving a much higher free cash flow.
This improvement significantly enhanced free cash flow generation compared to the prior year.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased from the prior quarter but decreased from a year ago. Operating cash flow was substantially higher than the prior year, though it declined from the previous quarter. Capital expenditure was higher in both comparisons. Consequently, free cash flow and its margin showed a mixed performance: improved versus the prior year but weakened versus the prior quarter.
Compared to the immediately preceding quarter, revenue was higher but operating cash flow and free cash flow were lower, resulting in a lower free cash flow margin. Compared to the same quarter one year earlier, revenue was slightly lower while operating cash flow and free cash flow were significantly higher, leading to a higher free cash flow margin.
Monitor the trend in capital expenditure, as it increased notably from both prior periods.