Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue declined from the prior year but improved from the prior quarter. Operating cash flow turned positive, resulting in a higher free cash flow margin, while the company's filing describes its operations as consisting of equipment operations and financial services.
- The company converted a portion of its revenue into positive operating cash flow, which after capital expenditure yielded a free cash flow margin that was higher than both the prior quarter and the year-ago quarter. Capital expenditure was slightly higher than the prior quarter but lower than the year-ago quarter on a relative basis.
- Compared to the prior quarter, revenue increased and operating cash flow shifted from negative to positive, driving a substantial improvement in free cash flow. Versus the year-ago quarter, revenue was lower, but operating cash flow was higher, and free cash flow improved both in absolute terms and as a margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$8.0B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.5B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.9B
Cash generated by operations before capital spending.
CapEx
$357.0M
Capital spending and related asset purchases.
FCF margin
9.8%
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 |
|---|---|---|---|---|---|
| 2023-07-30 | $15.8B | $3.0B | $303.0M | $2.7B | 17.3% |
| 2023-10-29 | $15.4B | $5.7B | $611.0M | $5.1B | 33.0% |
| 2024-01-28 | $12.2B | -$908.0M | $362.0M | -$1.3B | -10.4% |
| 2024-04-28 | $15.2B | $1.9B | $357.0M | $1.5B | 9.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 63.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.3% | 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 rebounded from a negative position in the prior quarter to a positive level, more than offsetting a slight increase in capital expenditure. This recovery was the primary factor behind the improved free cash flow margin. As noted in the company's filing, its equipment operations generate cash flows from manufacturing and selling equipment, while financial services provide financing activities.
The positive free cash flow provides the company with greater financial flexibility.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
The company converted a portion of its revenue into positive operating cash flow, which after capital expenditure yielded a free cash flow margin that was higher than both the prior quarter and the year-ago quarter. Capital expenditure was slightly higher than the prior quarter but lower than the year-ago quarter on a relative basis.
Compared to the prior quarter, revenue increased and operating cash flow shifted from negative to positive, driving a substantial improvement in free cash flow. Versus the year-ago quarter, revenue was lower, but operating cash flow was higher, and free cash flow improved both in absolute terms and as a margin.
Monitor whether the operating cash flow generation can be sustained given the lower revenue base compared to the prior year.