Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Cash conversion improved from the previous quarter, with free cash flow margin significantly higher. Revenue was lower than the prior quarter but higher than the same quarter last year, while operating cash flow and free cash flow both increased versus both comparison periods.
- Revenue decreased from the preceding quarter, but operating cash flow increased sharply, driving free cash flow higher. The free cash flow margin rose substantially compared to both the prior quarter and the same quarter one year earlier, reflecting stronger cash generation from lower capital expenditure relative to operating cash flow.
- Compared to the immediately preceding quarter, revenue was lower, while operating cash flow, free cash flow, and free cash flow margin were all higher. Versus the same quarter one year earlier, all metrics were higher, with operating cash flow and free cash flow showing improvement.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$7.1B
Trailing twelve-month free cash flow.
Quarter free cash flow
$4.2B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$4.5B
Cash generated by operations before capital spending.
CapEx
$243.0M
Capital spending and related asset purchases.
FCF margin
51.5%
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 |
|---|---|---|---|---|---|
| 2022-07-31 | $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% |
| 2023-04-30 | $8.2B | $4.5B | $243.0M | $4.2B | 51.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 2134.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.9% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$447.0M | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Stronger cash generation from operations
Operating cash flow increased markedly from the prior quarter and the year-ago quarter, outpacing revenue changes. This drove the free cash flow margin higher, indicating improved cash conversion efficiency in the current quarter.
The higher operating cash flow was the primary factor behind the improved free cash flow and margin in the current quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue decreased from the preceding quarter, but operating cash flow increased sharply, driving free cash flow higher. The free cash flow margin rose substantially compared to both the prior quarter and the same quarter one year earlier, reflecting stronger cash generation from lower capital expenditure relative to operating cash flow.
Compared to the immediately preceding quarter, revenue was lower, while operating cash flow, free cash flow, and free cash flow margin were all higher. Versus the same quarter one year earlier, all metrics were higher, with operating cash flow and free cash flow showing improvement.
Monitor the trend in operating cash flow relative to revenue, given the significant increase this quarter despite lower revenue.