Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow in Q4 FY2023 increased significantly compared to both the prior quarter and the same quarter last year, driven by higher revenue and improved cash conversion. The free cash flow margin reached its highest level among the periods shown.
- Operating cash flow increased sharply relative to revenue, leading to a substantial improvement in free cash flow margin.
- Compared to Q3 FY2023, revenue grew while operating cash flow and free cash flow increased dramatically. Versus Q4 FY2022, revenue and free cash flow also improved, with a higher margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$6.3B
Trailing twelve-month free cash flow.
Quarter free cash flow
$2.6B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$2.8B
Cash generated by operations before capital spending.
CapEx
$218.0M
Capital spending and related asset purchases.
FCF margin
30.7%
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 |
|---|---|---|---|---|---|
| 2022-04-30 | $7.4B | $3.7B | $179.0M | $3.5B | 47.2% |
| 2022-07-31 | $7.7B | $334.0M | $203.0M | $131.0M | 1.7% |
| 2022-10-31 | $7.8B | $313.0M | $198.0M | $115.0M | 1.5% |
| 2023-01-31 | $8.4B | $2.8B | $218.0M | $2.6B | 30.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -2622.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.6% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$3.6B | 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 surge
Operating cash flow rose sharply from the prior quarter, far outpacing revenue growth, resulting in a significant increase in free cash flow and margin.
The strong operating cash flow was the primary driver of free cash flow improvement.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow increased sharply relative to revenue, leading to a substantial improvement in free cash flow margin.
Compared to Q3 FY2023, revenue grew while operating cash flow and free cash flow increased dramatically. Versus Q4 FY2022, revenue and free cash flow also improved, with a higher margin.
Monitor whether operating cash flow can sustain its elevated level relative to revenue.