Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
In the current quarter, free cash flow was negative, driven by an operating cash outflow, while the margin improved from the same quarter a year ago but weakened from the prior quarter. Revenue was lower than the preceding quarter but higher than the year-ago period.
- Cash conversion was weak, as operating cash flow was negative and the free cash flow margin was negative. Revenue was lower than the prior quarter, but the operating cash flow turned from positive to negative, while capital expenditure decreased, resulting in a negative free cash flow.
- Compared with the prior quarter, revenue, operating cash flow, free cash flow, and margin were all lower, while capital expenditure was also lower. Compared with the same quarter a year ago, revenue and capital expenditure were higher, while operating cash flow, free cash flow, and margin improved (less negative).
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$4.8B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$1.6B
Free cash flow in the selected fiscal quarter.
Operating cash flow
-$1.2B
Cash generated by operations before capital spending.
CapEx
$315.0M
Capital spending and related asset purchases.
FCF margin
-12.3%
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 | $13.4B | $791.0M | $153.0M | $638.0M | 4.8% |
| 2022-07-31 | $14.1B | $2.2B | $250.0M | $1.9B | 13.7% |
| 2022-10-30 | $15.5B | $4.3B | $538.0M | $3.7B | 24.1% |
| 2023-01-29 | $12.7B | -$1.2B | $315.0M | -$1.6B | -12.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -79.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.5% | 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 Reversal
Operating cash flow turned from positive in the prior quarter to negative in the current quarter, despite lower capital expenditure. This reversal was the primary factor behind the negative free cash flow.
This change drove free cash flow from a positive position in the prior quarter to a negative one in the current quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Cash conversion was weak, as operating cash flow was negative and the free cash flow margin was negative. Revenue was lower than the prior quarter, but the operating cash flow turned from positive to negative, while capital expenditure decreased, resulting in a negative free cash flow.
Compared with the prior quarter, revenue, operating cash flow, free cash flow, and margin were all lower, while capital expenditure was also lower. Compared with the same quarter a year ago, revenue and capital expenditure were higher, while operating cash flow, free cash flow, and margin improved (less negative).
Monitor capital expenditure levels, as the company’s Smart Industrial operating model focuses on making significant investments in digital and automation capabilities.