Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Cash conversion strengthened markedly as operating cash flow rose while capital expenditure held relatively steady. Free cash flow margin improved compared to both the prior quarter and the same period a year ago.
- Revenue was higher than both the preceding quarter and the year-ago period, and operating cash flow improved substantially. Capital expenditure was slightly lower than the prior quarter and similar to the year-ago level, resulting in free cash flow that was higher than both comparable periods and a stronger free cash flow margin.
- Compared with the immediately preceding quarter, free cash flow and margin were higher, driven by a much higher operating cash flow. Versus the same quarter one year earlier, all metrics except capital expenditure were improved, with free cash flow and margin significantly higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$612.3M
Trailing twelve-month free cash flow.
Quarter free cash flow
$233.7M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$290.8M
Cash generated by operations before capital spending.
CapEx
$57.1M
Capital spending and related asset purchases.
FCF margin
14.1%
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 |
|---|---|---|---|---|---|
| 2022-08-31 | $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% |
| 2023-05-31 | $1.7B | $290.8M | $57.1M | $233.7M | 14.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 153.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.4% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$4.3B | 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 Improvement
Operating cash flow was substantially higher than both the prior quarter and the year-ago quarter, which was the strongest observable factor lifting free cash flow. This occurred alongside a slight decrease in capital expenditure from the previous quarter.
The higher operating cash flow directly drove the improved free cash flow and margin, making it the primary driver of the quarter's cash conversion performance.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher than both the preceding quarter and the year-ago period, and operating cash flow improved substantially. Capital expenditure was slightly lower than the prior quarter and similar to the year-ago level, resulting in free cash flow that was higher than both comparable periods and a stronger free cash flow margin.
Compared with the immediately preceding quarter, free cash flow and margin were higher, driven by a much higher operating cash flow. Versus the same quarter one year earlier, all metrics except capital expenditure were improved, with free cash flow and margin significantly higher.
Monitor the level of capital expenditure in coming quarters relative to recent periods, as it remained relatively stable while operating cash flow rose sharply.