Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue increased versus both prior periods, but free cash flow was lower than the immediate prior quarter and roughly stable year over year. Cash conversion weakened sequentially as operating cash flow fell more than revenue grew.
- Revenue grew while operating cash flow dropped sharply versus the previous quarter, causing free cash flow margin to narrow. Compared with the same quarter last year, revenue was higher yet operating cash flow was essentially flat, resulting in a slightly lower margin.
- Sequentially, free cash flow and margin declined markedly as operating cash flow contracted substantially. Year over year, free cash flow was nearly unchanged despite higher revenue, with margin somewhat lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.9B
Trailing twelve-month free cash flow.
Quarter free cash flow
$654.8M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$690.0M
Cash generated by operations before capital spending.
CapEx
$35.2M
Capital spending and related asset purchases.
FCF margin
33.2%
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 |
|---|---|---|---|---|---|
| 2023-04-30 | $1.7B | $432.1M | $31.2M | $400.9M | 23.3% |
| 2023-07-31 | $2.0B | $414.1M | $37.2M | $376.9M | 19.3% |
| 2023-10-31 | $1.9B | $1.5B | $36.8M | $1.5B | 79.3% |
| 2024-01-31 | $2.0B | $690.0M | $35.2M | $654.8M | 33.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 37.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.8% | 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 Volatility
Operating cash flow fell significantly from the prior quarter, far outpacing the revenue increase. This drove a sharp reduction in free cash flow margin despite stable capital expenditure.
The decline in cash conversion efficiency is a key metric to monitor in coming quarters.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue grew while operating cash flow dropped sharply versus the previous quarter, causing free cash flow margin to narrow. Compared with the same quarter last year, revenue was higher yet operating cash flow was essentially flat, resulting in a slightly lower margin.
Sequentially, free cash flow and margin declined markedly as operating cash flow contracted substantially. Year over year, free cash flow was nearly unchanged despite higher revenue, with margin somewhat lower.
Monitor whether operating cash flow returns to prior levels or stabilizes given its sharp sequential decline.