Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue increased compared to both the prior quarter and the same quarter last year. However, free cash flow margin narrowed, as operating cash flow decreased from the prior quarter and capital expenditure rose slightly.
- Revenue grew from both the prior quarter and the year-ago period, but operating cash flow was lower than the prior quarter and roughly stable versus the year-ago quarter. Capital expenditure increased slightly, resulting in free cash flow that was lower than the prior quarter and similar to the year-ago level, and the free cash flow margin declined from both comparison periods.
- Compared to the prior quarter, revenue was higher while operating cash flow, free cash flow, and free cash flow margin were all lower. Compared to the same quarter one year earlier, revenue was higher, operating cash flow was similar, free cash flow was similar, and free cash flow margin was lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$18.5B
Trailing twelve-month free cash flow.
Quarter free cash flow
$4.4B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$4.6B
Cash generated by operations before capital spending.
CapEx
$132.0M
Capital spending and related asset purchases.
FCF margin
35.6%
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 |
|---|---|---|---|---|---|
| 2023-07-30 | $8.9B | $4.7B | $122.0M | $4.6B | 51.8% |
| 2023-10-29 | $9.3B | $4.8B | $105.0M | $4.7B | 50.8% |
| 2024-02-04 | $12.0B | $4.8B | $122.0M | $4.7B | 39.2% |
| 2024-05-05 | $12.5B | $4.6B | $132.0M | $4.4B | 35.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 209.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.1% | 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.
Revenue growth offset by margin compression
Revenue increased relative to both the prior quarter and the year-ago quarter, but the free cash flow margin declined. This reflects a combination of lower operating cash flow generation relative to revenue and slightly higher capital expenditure.
The company converted a larger revenue base into a smaller proportion of free cash flow, indicating a less efficient cash conversion from revenue.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue grew from both the prior quarter and the year-ago period, but operating cash flow was lower than the prior quarter and roughly stable versus the year-ago quarter. Capital expenditure increased slightly, resulting in free cash flow that was lower than the prior quarter and similar to the year-ago level, and the free cash flow margin declined from both comparison periods.
Compared to the prior quarter, revenue was higher while operating cash flow, free cash flow, and free cash flow margin were all lower. Compared to the same quarter one year earlier, revenue was higher, operating cash flow was similar, free cash flow was similar, and free cash flow margin was lower.
The pending sale of the VMware end-user computing business and the availability of the unsecured revolving credit facility are key liquidity items to monitor.