Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
In the quarter ended October 28, 2023, free cash flow improved from a deficit to a smaller deficit, driven by a sharp increase in operating cash flow despite higher capital expenditure. Revenue was lower than the prior quarter but higher than the same quarter a year earlier.
- Operating cash flow increased relative to both the prior quarter and the year-ago quarter, while capital expenditure also rose. The resulting free cash flow, though still negative, was less negative than in both comparison periods, and the free cash flow margin improved from negative to a less negative level.
- Compared to the prior quarter, revenue was lower, operating cash flow was higher, and capital expenditure was higher, resulting in a less negative free cash flow. Compared to the same quarter a year earlier, revenue was higher, operating cash flow was higher, capital expenditure was higher, and free cash flow was less negative.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$711.3M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$35.6M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$505.8M
Cash generated by operations before capital spending.
CapEx
$541.4M
Capital spending and related asset purchases.
FCF margin
-0.5%
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 |
|---|---|---|---|---|---|
| 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% |
| 2023-10-28 | $7.3B | $505.8M | $541.4M | -$35.6M | -0.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -16.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 7.4% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$3.0B | 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 rose significantly compared to both the prior quarter and the year-ago quarter, while revenue was lower than the prior quarter. This improvement was the primary factor narrowing the free cash flow deficit.
The free cash flow margin turned from a more negative level to a less negative level, reflecting better cash conversion from operations.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow increased relative to both the prior quarter and the year-ago quarter, while capital expenditure also rose. The resulting free cash flow, though still negative, was less negative than in both comparison periods, and the free cash flow margin improved from negative to a less negative level.
Compared to the prior quarter, revenue was lower, operating cash flow was higher, and capital expenditure was higher, resulting in a less negative free cash flow. Compared to the same quarter a year earlier, revenue was higher, operating cash flow was higher, capital expenditure was higher, and free cash flow was less negative.
Monitor inventory levels, as the filing notes that lower inventory levels contributed to the year-to-date increase in operating cash flow.