Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was lower than the preceding quarter but higher than the year-ago quarter. Operating cash flow and free cash flow were lower than both periods, resulting in a weakened free cash flow margin.
- Cash conversion weakened, as operating cash flow fell relative to revenue compared with both the preceding quarter and the same quarter one year earlier.
- Compared with the preceding quarter, revenue, operating cash flow, and free cash flow were lower, while capital expenditure was higher. Versus the same quarter one year earlier, revenue was higher, but operating cash flow, free cash flow, and capital expenditure were all lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.2B
Trailing twelve-month free cash flow.
Quarter free cash flow
$379.2M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$695.7M
Cash generated by operations before capital spending.
CapEx
$316.5M
Capital spending and related asset purchases.
FCF margin
9.1%
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 |
|---|---|---|---|---|---|
| 2023-07-29 | $10.7B | $171.8M | $425.4M | -$253.6M | -2.4% |
| 2023-10-28 | $7.3B | $505.8M | $541.4M | -$35.6M | -0.5% |
| 2024-02-03 | $5.0B | $1.3B | $123.4M | $1.1B | 22.8% |
| 2024-05-04 | $4.2B | $695.7M | $316.5M | $379.2M | 9.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 126.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 7.6% | 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 Decline
Operating cash flow decreased relative to both the preceding quarter and the year-ago quarter. The filing attributed this primarily to a slower rate of inventory reduction and decreases in other current liabilities.
The lower operating cash flow directly reduced free cash flow and weakened the free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Cash conversion weakened, as operating cash flow fell relative to revenue compared with both the preceding quarter and the same quarter one year earlier.
Compared with the preceding quarter, revenue, operating cash flow, and free cash flow were lower, while capital expenditure was higher. Versus the same quarter one year earlier, revenue was higher, but operating cash flow, free cash flow, and capital expenditure were all lower.
The company disclosed that the decrease in operating cash flow was partly due to inventory levels declining at a slower rate than the prior year, a trend worth monitoring.