Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned positive in the current quarter after a negative prior quarter, supported by a strong increase in revenue and operating cash flow. The free cash flow margin recovered to a level similar to the same quarter a year earlier.
- Revenue increased compared with both the prior quarter and the same quarter last year. Operating cash flow rose from negative to positive sequentially and was higher year over year, driving a similar improvement in free cash flow. Capital expenditure was lower than the prior quarter but higher than the year-ago quarter, yet the conversion from revenue to free cash flow strengthened notably.
- Compared with the immediately preceding quarter, revenue, operating cash flow, free cash flow, and free cash flow margin all improved from a negative base. Year over year, revenue was higher, operating cash flow and free cash flow also increased, and the free cash flow margin remained stable at the same level as the prior year.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$4.9B
Trailing twelve-month free cash flow.
Quarter free cash flow
$830.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.1B
Cash generated by operations before capital spending.
CapEx
$269.0M
Capital spending and related asset purchases.
FCF margin
4.8%
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 | $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% |
| 2023-04-30 | $17.4B | $1.1B | $269.0M | $830.0M | 4.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 29.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.5% | 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 Recovery
Operating cash flow turned from a negative prior-quarter position to a positive level, exceeding the year-ago amount. This swing was the strongest observable driver of free cash flow improvement, as it more than offset the capital expenditure increase compared to last year.
Free cash flow moved from negative to positive sequentially and increased year over year, with the margin stabilizing at a level comparable to the prior year period.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased compared with both the prior quarter and the same quarter last year. Operating cash flow rose from negative to positive sequentially and was higher year over year, driving a similar improvement in free cash flow. Capital expenditure was lower than the prior quarter but higher than the year-ago quarter, yet the conversion from revenue to free cash flow strengthened notably.
Compared with the immediately preceding quarter, revenue, operating cash flow, free cash flow, and free cash flow margin all improved from a negative base. Year over year, revenue was higher, operating cash flow and free cash flow also increased, and the free cash flow margin remained stable at the same level as the prior year.
Monitor whether capital expenditure trends relative to operating cash flow sustain the improved free cash flow conversion in future quarters.