Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue declined versus both the prior quarter and the year-ago period, leading to lower operating cash flow and free cash flow. The free cash flow margin narrowed sequentially but improved compared to the same quarter last year.
- Free cash flow was supported by operating cash flow that exceeded capital expenditure, resulting in a positive free cash flow margin. Revenue decreased, while operating cash flow declined more than proportionally, compressing the conversion rate.
- Compared to the prior quarter, revenue, operating cash flow, capital expenditure, and free cash flow were all lower, and the free cash flow margin weakened. Versus the same quarter last year, revenue and operating cash flow were lower, capital expenditure was lower, free cash flow was lower, but the free cash flow margin improved.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$3.1B
Trailing twelve-month free cash flow.
Quarter free cash flow
$619.7M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$807.9M
Cash generated by operations before capital spending.
CapEx
$188.2M
Capital spending and related asset purchases.
FCF margin
28.7%
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 |
|---|---|---|---|---|---|
| 2023-07-29 | $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% |
| 2024-05-04 | $2.2B | $807.9M | $188.2M | $619.7M | 28.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 205.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 8.7% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$5.6B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Revenue Decline Impact
The largest observable change was the drop in revenue, which directly reduced operating cash flow. The filing notes a decrease in gross margin percentage compared to the prior year, consistent with the lower net income.
Lower revenue drove a reduction in both operating cash flow and free cash flow relative to the prior periods.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Free cash flow was supported by operating cash flow that exceeded capital expenditure, resulting in a positive free cash flow margin. Revenue decreased, while operating cash flow declined more than proportionally, compressing the conversion rate.
Compared to the prior quarter, revenue, operating cash flow, capital expenditure, and free cash flow were all lower, and the free cash flow margin weakened. Versus the same quarter last year, revenue and operating cash flow were lower, capital expenditure was lower, free cash flow was lower, but the free cash flow margin improved.
Monitor the trajectory of operating cash flow relative to revenue, as its decline exceeded the revenue contraction in the current quarter.