Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Cash conversion weakened from both the prior quarter and the year-ago period, as operating cash flow fell while capital expenditure rose. Free cash flow and its margin were lower sequentially and year-over-year despite a higher revenue compared to the same quarter last year.
- Revenue was lower than the preceding quarter but higher than a year ago. Operating cash flow declined from both comparable periods, capital expenditure increased, and free cash flow as well as free cash flow margin were lower sequentially and year-over-year.
- Compared to the immediately preceding quarter, revenue, operating cash flow, free cash flow, and margin were all lower, while capital expenditure was higher. Compared to the same quarter one year earlier, revenue was higher, but operating cash flow, free cash flow, and margin were lower, and capital expenditure was higher.
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
$371.4M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$417.4M
Cash generated by operations before capital spending.
CapEx
$46.0M
Capital spending and related asset purchases.
FCF margin
30.8%
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 | $1.2B | $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% |
| 2023-05-31 | $1.2B | $417.4M | $46.0M | $371.4M | 30.8% |
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 | 3.8% | Lower capital intensity usually supports FCF margin. |
| Net cash | $423.8M | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Weakened cash conversion
Operating cash flow declined relative to revenue, and capital expenditure increased, resulting in a lower free cash flow margin compared to both the prior quarter and the year-ago quarter.
Free cash flow was lower than both the preceding quarter and the same quarter one year earlier.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was lower than the preceding quarter but higher than a year ago. Operating cash flow declined from both comparable periods, capital expenditure increased, and free cash flow as well as free cash flow margin were lower sequentially and year-over-year.
Compared to the immediately preceding quarter, revenue, operating cash flow, free cash flow, and margin were all lower, while capital expenditure was higher. Compared to the same quarter one year earlier, revenue was higher, but operating cash flow, free cash flow, and margin were lower, and capital expenditure was higher.
Monitor the trend in capital expenditure, which increased from both the prior quarter and the year-ago quarter.