Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue and operating cash flow both increased from the prior quarter and from a year ago, while capital expenditure was essentially stable. Free cash flow and free cash flow margin improved sequentially and compared with the same period last year.
- Operating cash flow was higher than the prior quarter and the year-ago quarter, and with capital expenditure nearly unchanged, free cash flow followed a similar improving trend. The free cash flow margin strengthened both sequentially and year-over-year, reflecting the conversion of higher revenue into cash.
- Compared with the immediately preceding quarter, revenue, operating cash flow, free cash flow, and free cash flow margin were all higher. Compared with the same quarter one year earlier, the same metrics were also higher, while capital expenditure was slightly higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$17.4B
Trailing twelve-month free cash flow.
Quarter free cash flow
$4.6B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$4.7B
Cash generated by operations before capital spending.
CapEx
$122.0M
Capital spending and related asset purchases.
FCF margin
51.8%
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 |
|---|---|---|---|---|---|
| 2022-10-30 | $8.9B | $4.6B | $122.0M | $4.5B | 50.0% |
| 2023-01-29 | $8.9B | $4.0B | $103.0M | $3.9B | 44.1% |
| 2023-04-30 | $8.7B | $4.5B | $122.0M | $4.4B | 50.2% |
| 2023-07-30 | $8.9B | $4.7B | $122.0M | $4.6B | 51.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 139.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.4% | 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.
Operating Cash Flow Growth
Operating cash flow increased both sequentially and year-over-year, providing the primary lift to free cash flow. With capital expenditure nearly unchanged, the rise in operating cash flow directly translated into higher free cash flow and margin.
The improvement in operating cash flow was the strongest observable driver of the quarter's free cash flow increase.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow was higher than the prior quarter and the year-ago quarter, and with capital expenditure nearly unchanged, free cash flow followed a similar improving trend. The free cash flow margin strengthened both sequentially and year-over-year, reflecting the conversion of higher revenue into cash.
Compared with the immediately preceding quarter, revenue, operating cash flow, free cash flow, and free cash flow margin were all higher. Compared with the same quarter one year earlier, the same metrics were also higher, while capital expenditure was slightly higher.
Monitor capital expenditure levels, which remained virtually flat sequentially but were slightly higher year-over-year, as any material change could affect free cash flow conversion.