Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
The current quarter generated positive free cash flow, a notable improvement from the negative level one year earlier, but it weakened sharply from the preceding quarter. The free cash flow margin turned positive versus the prior-year period, yet contracted considerably from the previous quarter.
- Revenue was slightly lower than the previous quarter but moderately higher than a year ago. Operating cash flow and free cash flow improved significantly from the year-ago quarter, supported by a smaller increase in capital expenditure, but both fell steeply from the prior quarter. The free cash flow margin, though positive, dropped sharply from the prior quarter.
- Compared with the immediately preceding quarter, all cash flow measures were lower and the free cash flow margin weakened substantially. Versus the same quarter one year before, operating cash flow and free cash flow were higher, capital expenditure was higher, and the free cash flow margin shifted from negative to positive.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$457.2M
Trailing twelve-month free cash flow.
Quarter free cash flow
$41.9M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$103.4M
Cash generated by operations before capital spending.
CapEx
$61.5M
Capital spending and related asset purchases.
FCF margin
2.7%
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 | $1.5B | $136.5M | $57.9M | $78.6M | 5.1% |
| 2022-08-31 | $1.6B | $95.7M | $65.2M | $30.5M | 1.9% |
| 2022-11-30 | $1.7B | $401.4M | $95.2M | $306.2M | 18.1% |
| 2023-02-28 | $1.6B | $103.4M | $61.5M | $41.9M | 2.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 30.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.9% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$3.5B | 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 Volatility
Operating cash flow was the strongest observable driver of free cash flow, improving markedly from the year-ago quarter but weakening sharply from the prior quarter. This volatility drove the sequential collapse in free cash flow and margin.
The sustainability of operating cash flow will largely determine whether free cash flow can remain positive or face renewed deterioration.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was slightly lower than the previous quarter but moderately higher than a year ago. Operating cash flow and free cash flow improved significantly from the year-ago quarter, supported by a smaller increase in capital expenditure, but both fell steeply from the prior quarter. The free cash flow margin, though positive, dropped sharply from the prior quarter.
Compared with the immediately preceding quarter, all cash flow measures were lower and the free cash flow margin weakened substantially. Versus the same quarter one year before, operating cash flow and free cash flow were higher, capital expenditure was higher, and the free cash flow margin shifted from negative to positive.
Monitor whether operating cash flow can sustain its improvement from the year-ago period or whether the sequential decline signals renewed pressure.