Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow was lower than the same quarter last year but improved from the prior quarter. The cash conversion rate weakened year-over-year while strengthening sequentially.
- Operating cash flow was unchanged from the prior quarter. Capital expenditure was higher sequentially, yet free cash flow and free cash flow margin improved due to revenue being lower. Compared to a year ago, operating cash flow was lower, capital expenditure was higher, and free cash flow decreased with a lower free cash flow margin.
- Revenue was stable versus the prior year but decreased from the prior quarter. Free cash flow margin declined year-over-year and increased sequentially.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$3.7B
Trailing twelve-month free cash flow.
Quarter free cash flow
$817.9M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.1B
Cash generated by operations before capital spending.
CapEx
$324.6M
Capital spending and related asset purchases.
FCF margin
26.6%
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 |
|---|---|---|---|---|---|
| 2022-10-29 | $3.2B | $1.1B | $304.5M | $844.8M | 26.0% |
| 2023-01-28 | $3.2B | $1.4B | $176.2M | $1.2B | 37.9% |
| 2023-04-29 | $3.3B | $1.1B | $284.3M | $797.2M | 24.4% |
| 2023-07-29 | $3.1B | $1.1B | $324.6M | $817.9M | 26.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 93.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 10.6% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$5.4B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Capital Expenditure Increase
Capital expenditure was higher than both the prior quarter and the same quarter last year. This drove the year-over-year decline in free cash flow despite stable revenue.
The higher capital expenditure compressed free cash flow margin compared with the year-ago period.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow was unchanged from the prior quarter. Capital expenditure was higher sequentially, yet free cash flow and free cash flow margin improved due to revenue being lower. Compared to a year ago, operating cash flow was lower, capital expenditure was higher, and free cash flow decreased with a lower free cash flow margin.
Revenue was stable versus the prior year but decreased from the prior quarter. Free cash flow margin declined year-over-year and increased sequentially.
Monitor capital expenditure trends relative to operating cash flow, as the year-over-year increase in capex was the primary factor in the free cash flow decline.