Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue slightly decreased from the prior quarter, while free cash flow margin improved. Operating cash flow remained stable versus the prior quarter and significantly higher year over year.
- Revenue was slightly lower sequentially but higher year over year. Operating cash flow was unchanged from the prior quarter and substantially higher versus the same quarter last year, driving a similar pattern in free cash flow. Free cash flow margin improved both sequentially and year over year, reflecting stronger cash conversion relative to revenue.
- Compared to the prior quarter, revenue was slightly lower, operating cash flow was stable, capital expenditure was lower, and free cash flow margin was higher. Compared to the same quarter a year ago, revenue was higher, operating cash flow was significantly higher, capital expenditure was higher, and free cash flow margin was markedly improved.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$5.9B
Trailing twelve-month free cash flow.
Quarter free cash flow
$2.0B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$2.3B
Cash generated by operations before capital spending.
CapEx
$255.0M
Capital spending and related asset purchases.
FCF margin
30.7%
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 |
|---|---|---|---|---|---|
| 2022-07-31 | $6.5B | $1.5B | $210.0M | $1.3B | 19.3% |
| 2022-10-30 | $6.7B | $857.0M | $223.0M | $634.0M | 9.4% |
| 2023-01-29 | $6.7B | $2.3B | $287.0M | $2.0B | 29.4% |
| 2023-04-30 | $6.6B | $2.3B | $255.0M | $2.0B | 30.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 129.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.8% | Lower capital intensity usually supports FCF margin. |
| Net cash | n/a | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Strong operating cash flow generation
Operating cash flow was unchanged from the prior quarter and significantly higher year over year, supporting a high free cash flow margin. The filing notes that cash from operating activities for the six-month period increased due to lower income taxes and inventory payments and higher cash collections.
This driver underpinned a material improvement in free cash flow margin compared to the prior year.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was slightly lower sequentially but higher year over year. Operating cash flow was unchanged from the prior quarter and substantially higher versus the same quarter last year, driving a similar pattern in free cash flow. Free cash flow margin improved both sequentially and year over year, reflecting stronger cash conversion relative to revenue.
Compared to the prior quarter, revenue was slightly lower, operating cash flow was stable, capital expenditure was lower, and free cash flow margin was higher. Compared to the same quarter a year ago, revenue was higher, operating cash flow was significantly higher, capital expenditure was higher, and free cash flow margin was markedly improved.
Monitor whether operating cash flow can sustain its elevated level relative to revenue in upcoming quarters.