Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was stable versus the prior quarter while operating cash flow and free cash flow were lower, resulting in a narrowed free cash flow margin. Compared to the same quarter last year, revenue, operating cash flow, and free cash flow were all higher, and the free cash flow margin was similar.
- Cash conversion weakened sequentially: revenue was unchanged but operating cash flow fell, driving free cash flow lower and compressing the free cash flow margin. Year over year, cash conversion improved as revenue and operating cash flow both rose, with the free cash flow margin remaining broadly stable.
- Compared to the prior quarter, free cash flow and margin were lower even though revenue was stable, reflecting a weaker conversion of revenue into operating cash flow. Versus the same quarter one year earlier, free cash flow and margin were both higher, supported by increased revenue and operating cash flow.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$16.9B
Trailing twelve-month free cash flow.
Quarter free cash flow
$3.9B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$4.0B
Cash generated by operations before capital spending.
CapEx
$103.0M
Capital spending and related asset purchases.
FCF margin
44.1%
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 |
|---|---|---|---|---|---|
| 2022-05-01 | $8.1B | $4.2B | $85.0M | $4.2B | 51.3% |
| 2022-07-31 | $8.5B | $4.4B | $116.0M | $4.3B | 50.9% |
| 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% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 104.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.2% | 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 Decline
Operating cash flow dropped sequentially despite stable revenue, causing free cash flow and margin to weaken. This was the strongest observable driver of the quarter's free cash flow change.
Lower operating cash flow directly reduced free cash flow and margin versus the prior quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Cash conversion weakened sequentially: revenue was unchanged but operating cash flow fell, driving free cash flow lower and compressing the free cash flow margin. Year over year, cash conversion improved as revenue and operating cash flow both rose, with the free cash flow margin remaining broadly stable.
Compared to the prior quarter, free cash flow and margin were lower even though revenue was stable, reflecting a weaker conversion of revenue into operating cash flow. Versus the same quarter one year earlier, free cash flow and margin were both higher, supported by increased revenue and operating cash flow.
Monitor whether the operating cash flow level recovers toward the prior quarter's level, as it was the primary factor in the sequential decline in free cash flow.