Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
The company generated free cash flow with a margin that improved from the prior quarter but weakened from the same quarter one year earlier. Revenue was higher than both the prior quarter and the year-ago quarter, while operating cash flow was higher than the prior quarter but lower than a year ago.
- Operating cash flow exceeded capital expenditure, resulting in positive free cash flow. The free cash flow margin was supported by a higher operating cash flow relative to revenue, while capital expenditure consumed a portion of that cash flow.
- Compared to the prior quarter, free cash flow and margin improved as operating cash flow increased and capital expenditure decreased. Compared to the same quarter one year earlier, free cash flow and margin weakened despite slightly higher revenue, due to lower operating cash flow and higher capital expenditure.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.5B
Trailing twelve-month free cash flow.
Quarter free cash flow
$388.4M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$665.4M
Cash generated by operations before capital spending.
CapEx
$277.0M
Capital spending and related asset purchases.
FCF margin
15.4%
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 | $2.7B | $896.1M | $238.4M | $657.7M | 24.8% |
| 2022-11-30 | $2.4B | $626.3M | $248.8M | $377.5M | 15.5% |
| 2023-02-28 | $2.0B | $476.3M | $351.6M | $124.7M | 6.2% |
| 2023-05-31 | $2.5B | $665.4M | $277.0M | $388.4M | 15.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 285.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 11.0% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$11.3B | 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 Variability
Operating cash flow was the strongest observable driver, as it increased from the prior quarter but decreased from the year-ago quarter, directly influencing the direction of free cash flow.
The change in operating cash flow caused free cash flow and margin to improve sequentially but weaken year over year.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow exceeded capital expenditure, resulting in positive free cash flow. The free cash flow margin was supported by a higher operating cash flow relative to revenue, while capital expenditure consumed a portion of that cash flow.
Compared to the prior quarter, free cash flow and margin improved as operating cash flow increased and capital expenditure decreased. Compared to the same quarter one year earlier, free cash flow and margin weakened despite slightly higher revenue, due to lower operating cash flow and higher capital expenditure.
Capital expenditure, which was higher than a year ago but lower than the prior quarter, should be monitored for its impact on free cash flow consistency.