Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was stable compared to the prior quarter and the year-ago quarter. Operating cash flow turned negative, resulting in a negative free cash flow margin, a significant shift from positive margins in both comparison periods.
- Revenue was essentially unchanged, but operating cash flow swung from a large inflow in the prior quarter to an outflow, and from a modest inflow a year ago to an outflow. Capital expenditure was slightly lower than both comparison periods, yet free cash flow turned deeply negative, producing a negative margin.
- Compared to the immediately preceding quarter, operating cash flow and free cash flow weakened sharply, and the margin turned from positive to negative. Versus the same quarter one year earlier, operating cash flow and free cash flow also weakened, and the margin declined from slightly positive to negative.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$4.5B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$319.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
-$66.0M
Cash generated by operations before capital spending.
CapEx
$253.0M
Capital spending and related asset purchases.
FCF margin
-2.5%
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 |
|---|---|---|---|---|---|
| 2022-11-30 | $13.3B | $1.0B | $236.0M | $765.0M | 5.7% |
| 2023-02-28 | $12.4B | $2.2B | $200.0M | $2.0B | 16.4% |
| 2023-05-31 | $12.8B | $2.3B | $269.0M | $2.0B | 15.5% |
| 2023-08-31 | $12.9B | -$66.0M | $253.0M | -$319.0M | -2.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -22.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.0% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$2.8B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Working Capital Outflow
The filing attributes the operating cash outflow to a net change in working capital that decreased cash by a larger amount than in the year-ago quarter, with the primary driver being unfavorable changes in cash collateral from hedging transactions.
This working capital swing was the strongest observable factor turning free cash flow negative despite stable revenue.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was essentially unchanged, but operating cash flow swung from a large inflow in the prior quarter to an outflow, and from a modest inflow a year ago to an outflow. Capital expenditure was slightly lower than both comparison periods, yet free cash flow turned deeply negative, producing a negative margin.
Compared to the immediately preceding quarter, operating cash flow and free cash flow weakened sharply, and the margin turned from positive to negative. Versus the same quarter one year earlier, operating cash flow and free cash flow also weakened, and the margin declined from slightly positive to negative.
Monitor the net change in working capital, which the filing notes was a large outflow driven primarily by unfavorable changes in cash collateral from hedging transactions.