Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue declined from the prior quarter but operating cash flow and free cash flow improved significantly, resulting in a higher free cash flow margin. Compared to the same quarter last year, all key cash flow metrics were higher.
- Operating cash flow rose sharply compared to the prior quarter, while capital expenditure increased modestly, leading to a substantial rise in free cash flow and margin. The filing notes that the company's equipment operations, which manufacture and sell equipment, are the primary source of earnings and cash flows.
- Compared to the prior quarter, revenue was lower but operating cash flow, free cash flow, and margin were all higher. Versus the same quarter a year ago, revenue, operating cash flow, free cash flow, and margin were all higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$5.8B
Trailing twelve-month free cash flow.
Quarter free cash flow
$2.7B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$3.0B
Cash generated by operations before capital spending.
CapEx
$303.0M
Capital spending and related asset purchases.
FCF margin
17.3%
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 |
|---|---|---|---|---|---|
| 2022-10-30 | $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% |
| 2023-07-30 | $15.8B | $3.0B | $303.0M | $2.7B | 17.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 92.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.9% | 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 Improvement
Operating cash flow increased substantially from the prior quarter and also rose compared to the same quarter last year, driving the improvement in free cash flow and margin.
The higher operating cash flow resulted in a stronger free cash flow position despite a lower revenue base.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow rose sharply compared to the prior quarter, while capital expenditure increased modestly, leading to a substantial rise in free cash flow and margin. The filing notes that the company's equipment operations, which manufacture and sell equipment, are the primary source of earnings and cash flows.
Compared to the prior quarter, revenue was lower but operating cash flow, free cash flow, and margin were all higher. Versus the same quarter a year ago, revenue, operating cash flow, free cash flow, and margin were all higher.
Monitor the revenue trend, as it decreased from the prior quarter while other cash flow metrics improved.