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 as operating cash flow fell short of capital expenditure, despite revenue being higher than both prior periods. The free cash flow margin improved from a year ago but weakened compared to the previous quarter.
- Revenue was higher than both the prior quarter and the year-ago quarter, yet operating cash flow was lower than the prior quarter, though improved from a year ago. Capital expenditure was higher than both comparison periods, leading to negative free cash flow and a negative margin. The filing notes that for the year-to-date period, operating cash flow benefited from lower inventory levels, while seasonal working capital requirements typically peak in September and October.
- Compared to the prior quarter, free cash flow turned from positive to negative, and the margin weakened significantly. Versus the same quarter a year ago, free cash flow remained negative but the margin improved.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$569.2M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$253.6M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$171.8M
Cash generated by operations before capital spending.
CapEx
$425.4M
Capital spending and related asset purchases.
FCF margin
-2.4%
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 |
|---|---|---|---|---|---|
| 2022-10-29 | $6.9B | $213.5M | $391.2M | -$177.7M | -2.6% |
| 2023-01-28 | -$5.2B | $880.7M | $281.8M | $598.9M | -11.5% |
| 2023-04-29 | $3.9B | $752.0M | $350.4M | $401.6M | 10.2% |
| 2023-07-29 | $10.7B | $171.8M | $425.4M | -$253.6M | -2.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -126.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 4.0% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$2.9B | 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 decline relative to revenue
Operating cash flow was lower than the prior quarter despite higher revenue, indicating a weaker cash conversion. This decline was the primary factor behind the negative free cash flow, as capital expenditure increased.
The lower operating cash flow constrained free cash flow, turning it negative despite revenue growth.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher than both the prior quarter and the year-ago quarter, yet operating cash flow was lower than the prior quarter, though improved from a year ago. Capital expenditure was higher than both comparison periods, leading to negative free cash flow and a negative margin. The filing notes that for the year-to-date period, operating cash flow benefited from lower inventory levels, while seasonal working capital requirements typically peak in September and October.
Compared to the prior quarter, free cash flow turned from positive to negative, and the margin weakened significantly. Versus the same quarter a year ago, free cash flow remained negative but the margin improved.
Monitor the trajectory of free cash flow margin as the company enters the seasonal peak working capital period noted in the filing.