Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow improved from the prior quarter but declined from the same quarter last year. The cash conversion rate strengthened sequentially while weakening year over year.
- Revenue was stable compared to a year ago and higher than the prior quarter. Operating cash flow increased from the previous quarter but was lower than the same quarter last year, leading to a free cash flow margin that improved sequentially and weakened year over year.
- Compared to the prior quarter, free cash flow and margin were higher, driven by stronger operating cash flow and slightly lower capital expenditure. Versus the same quarter one year earlier, free cash flow and margin were lower, as operating cash flow declined while capital expenditure was slightly lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.6B
Trailing twelve-month free cash flow.
Quarter free cash flow
$538.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$569.1M
Cash generated by operations before capital spending.
CapEx
$31.1M
Capital spending and related asset purchases.
FCF margin
40.0%
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 | $1.1B | $421.4M | $34.5M | $386.9M | 34.3% |
| 2022-08-31 | $1.2B | $364.3M | $30.6M | $333.7M | 28.1% |
| 2022-11-30 | $1.2B | $355.4M | $35.3M | $320.1M | 27.4% |
| 2023-02-28 | $1.3B | $569.1M | $31.1M | $538.0M | 40.0% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | n/a | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.3% | 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.
Sequential Operating Cash Flow Improvement
Operating cash flow rose from the prior quarter, contributing to a higher free cash flow and margin. This was the strongest observable driver of the quarter's cash conversion performance.
The sequential increase in operating cash flow was the primary factor behind the improved free cash flow margin this quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was stable compared to a year ago and higher than the prior quarter. Operating cash flow increased from the previous quarter but was lower than the same quarter last year, leading to a free cash flow margin that improved sequentially and weakened year over year.
Compared to the prior quarter, free cash flow and margin were higher, driven by stronger operating cash flow and slightly lower capital expenditure. Versus the same quarter one year earlier, free cash flow and margin were lower, as operating cash flow declined while capital expenditure was slightly lower.
Monitor the trend in operating cash flow, which declined year over year despite stable revenue.