Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
The quarter's free cash flow was negative, reflecting an operating cash outflow and capital spending. Cash conversion weakened sequentially from the prior quarter's positive free cash flow but improved compared to the same quarter last year.
- Revenue was lower than both the prior quarter and the year-ago quarter. Operating cash flow was negative, but the outflow was significantly smaller than the negative cash flow a year earlier, resulting in a free cash flow margin that was improved from the year-ago period but still negative.
- Compared to the immediately preceding quarter, free cash flow turned from a surplus to a deficit, driven by a decline in operating cash flow. Versus the same quarter one year earlier, free cash flow was less negative, with operating cash flow showing a notable improvement.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.0B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$535.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
-$331.0M
Cash generated by operations before capital spending.
CapEx
$204.0M
Capital spending and related asset purchases.
FCF margin
-5.7%
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 |
|---|---|---|---|---|---|
| 2022-07-30 | $10.3B | $675.0M | $226.0M | $449.0M | 4.3% |
| 2022-10-29 | $10.6B | $601.0M | $255.0M | $346.0M | 3.3% |
| 2023-01-28 | $14.7B | $1.9B | $234.0M | $1.7B | 11.5% |
| 2023-04-29 | $9.5B | -$331.0M | $204.0M | -$535.0M | -5.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -219.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.2% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$140.0M | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Seasonal Working Capital Needs
The filing indicates that the decrease in cash was primarily due to inventory purchases and payments, capital expenditures, and dividends. The negative free cash flow in this quarter is consistent with the seasonal pattern of the business, where a large proportion of revenue is generated in the fourth quarter.
The negative free cash flow is a normal seasonal phenomenon, reflecting higher cash outflows for inventory and other items ahead of the peak selling period.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was lower than both the prior quarter and the year-ago quarter. Operating cash flow was negative, but the outflow was significantly smaller than the negative cash flow a year earlier, resulting in a free cash flow margin that was improved from the year-ago period but still negative.
Compared to the immediately preceding quarter, free cash flow turned from a surplus to a deficit, driven by a decline in operating cash flow. Versus the same quarter one year earlier, free cash flow was less negative, with operating cash flow showing a notable improvement.
Monitor the timing and volume of inventory purchases and payments, as the filing notes these as primary factors in the cash balance decrease.