Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned negative this quarter as operating cash flow weakened sharply while capital expenditure rose. Revenue was slightly higher than the prior quarter but lower than a year ago.
- Operating cash flow was lower than capital expenditure, resulting in negative free cash flow and a negative free cash flow margin. Revenue conversion into cash was weaker compared to both the prior quarter and the same quarter last year.
- Compared to the immediately preceding quarter, operating cash flow and free cash flow both declined, and free cash flow margin turned from positive to negative. Versus the same quarter one year earlier, revenue, operating cash flow, and free cash flow were all lower, while capital expenditure was slightly reduced.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.4B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$108.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$109.0M
Cash generated by operations before capital spending.
CapEx
$217.0M
Capital spending and related asset purchases.
FCF margin
-1.1%
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 |
|---|---|---|---|---|---|
| 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% |
| 2023-07-29 | $9.6B | $512.0M | $191.0M | $321.0M | 3.3% |
| 2023-10-28 | $9.8B | $109.0M | $217.0M | -$108.0M | -1.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -41.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.2% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$509.0M | 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 Weakness
Operating cash flow dropped significantly from both the prior quarter and the year-ago quarter, falling below capital expenditure and driving free cash flow negative. This is the strongest observable driver of the quarter's cash conversion outcome.
The decline in operating cash flow was the primary factor behind the negative free cash flow and the weakened free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow was lower than capital expenditure, resulting in negative free cash flow and a negative free cash flow margin. Revenue conversion into cash was weaker compared to both the prior quarter and the same quarter last year.
Compared to the immediately preceding quarter, operating cash flow and free cash flow both declined, and free cash flow margin turned from positive to negative. Versus the same quarter one year earlier, revenue, operating cash flow, and free cash flow were all lower, while capital expenditure was slightly reduced.
Monitor whether operating cash flow can recover to a level that covers capital expenditure, given the sharp decline this quarter.