Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue declined from both the preceding quarter and the same quarter a year ago. Free cash flow improved sequentially, and free cash flow margin strengthened from the prior period, though it weakened relative to the prior year.
- Cash conversion reflects the relationship between operating cash flow and revenue, with capital expenditure subtracted to yield free cash flow. In the current quarter, the free cash flow margin improved sequentially as capital expenditure was lower, even as revenue and operating cash flow decreased.
- Compared to the prior quarter, revenue and operating cash flow were lower, but capital expenditure decreased significantly, leading to higher free cash flow and an improved free cash flow margin. Compared to the same quarter last year, revenue, operating cash flow, and free cash flow were all lower, and capital expenditure was higher, resulting in a slightly weakened free cash flow margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$3.2B
Trailing twelve-month free cash flow.
Quarter free cash flow
$915.9M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.1B
Cash generated by operations before capital spending.
CapEx
$223.0M
Capital spending and related asset purchases.
FCF margin
36.4%
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 |
|---|---|---|---|---|---|
| 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% |
| 2023-10-28 | $2.7B | $1.2B | $476.4M | $710.9M | 26.2% |
| 2024-02-03 | $2.5B | $1.1B | $223.0M | $915.9M | 36.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 197.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 8.9% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$5.1B | 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 reduction
Capital expenditure was notably lower than the prior quarter, while revenue and operating cash flow also declined. The reduction in capital expenditure was the most prominent movement among the cash flow components.
This reduction enabled free cash flow to rise and the free cash flow margin to improve, despite lower revenue and operating cash flow.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Cash conversion reflects the relationship between operating cash flow and revenue, with capital expenditure subtracted to yield free cash flow. In the current quarter, the free cash flow margin improved sequentially as capital expenditure was lower, even as revenue and operating cash flow decreased.
Compared to the prior quarter, revenue and operating cash flow were lower, but capital expenditure decreased significantly, leading to higher free cash flow and an improved free cash flow margin. Compared to the same quarter last year, revenue, operating cash flow, and free cash flow were all lower, and capital expenditure was higher, resulting in a slightly weakened free cash flow margin.
Monitor the trend in capital expenditure, as it showed a notable decline from the prior quarter.