Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned positive this quarter after a negative prior quarter, supported by a higher operating cash flow. Revenue increased compared to both the prior quarter and the same quarter last year.
- Operating cash flow improved significantly from the prior quarter, while capital expenditure rose moderately, resulting in a positive free cash flow margin. The margin strengthened from negative territory in the prior quarter but remained below the level of the same quarter last year.
- Compared to the prior quarter, revenue and operating cash flow were higher, and free cash flow shifted from negative to positive. Versus the same quarter one year earlier, revenue was higher but free cash flow and free cash flow margin were lower, as capital expenditure increased more than operating cash flow.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$424.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
$254.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$736.4M
Cash generated by operations before capital spending.
CapEx
$482.4M
Capital spending and related asset purchases.
FCF margin
2.5%
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 |
|---|---|---|---|---|---|
| 2022-04-29 | $8.8B | $449.5M | $281.6M | $167.9M | 1.9% |
| 2022-07-29 | $9.4B | $498.5M | $377.2M | $121.3M | 1.3% |
| 2022-10-28 | $9.5B | $300.2M | $419.4M | -$119.3M | -1.3% |
| 2023-02-03 | $10.2B | $736.4M | $482.4M | $254.0M | 2.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 38.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 4.7% | 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 increased substantially from the prior quarter, driving the turnaround in free cash flow. This improvement was the strongest observable factor in the quarter's cash conversion.
The higher operating cash flow was the primary reason free cash flow turned positive this quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow improved significantly from the prior quarter, while capital expenditure rose moderately, resulting in a positive free cash flow margin. The margin strengthened from negative territory in the prior quarter but remained below the level of the same quarter last year.
Compared to the prior quarter, revenue and operating cash flow were higher, and free cash flow shifted from negative to positive. Versus the same quarter one year earlier, revenue was higher but free cash flow and free cash flow margin were lower, as capital expenditure increased more than operating cash flow.
Monitor the trend in capital expenditure relative to operating cash flow, as a larger gap this quarter compared to last year reduced free cash flow.