Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow and margin improved sequentially and year-over-year, supported by stronger operating cash flow and lower capital expenditure. Revenue was lower in both comparisons, but cash generation remained robust.
- Despite lower revenue, operating cash flow increased sharply from the prior quarter and held near the year-ago level, resulting in an improved cash conversion rate as capital spending declined relative to the prior year.
- Compared to the preceding quarter, revenue weakened but operating cash flow strengthened substantially, lifting free cash flow and margin. Versus the same quarter one year earlier, revenue and operating cash flow were lower, but a reduction in capital expenditure more than offset the decline, leading to higher free cash flow and an improved margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.7B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.7B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$3.4B
Cash generated by operations before capital spending.
CapEx
$1.8B
Capital spending and related asset purchases.
FCF margin
7.7%
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 |
|---|---|---|---|---|---|
| 2022-08-31 | $23.2B | $1.6B | $1.3B | $323.0M | 1.4% |
| 2022-11-30 | $22.8B | $1.5B | $1.9B | -$340.0M | -1.5% |
| 2023-02-28 | $22.2B | $2.3B | $1.3B | $998.0M | 4.5% |
| 2023-05-31 | $21.9B | $3.4B | $1.8B | $1.7B | 7.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 110.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 8.0% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$12.9B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Stronger operating cash flow
Operating cash flow rose sharply from the prior quarter, more than offsetting lower revenue and higher capital spending. Compared to the year-ago quarter, lower capital expenditure was the primary factor behind free cash flow growth.
This demonstrates that cash generation improved even amid lower revenue, supporting free cash flow margin expansion.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Despite lower revenue, operating cash flow increased sharply from the prior quarter and held near the year-ago level, resulting in an improved cash conversion rate as capital spending declined relative to the prior year.
Compared to the preceding quarter, revenue weakened but operating cash flow strengthened substantially, lifting free cash flow and margin. Versus the same quarter one year earlier, revenue and operating cash flow were lower, but a reduction in capital expenditure more than offset the decline, leading to higher free cash flow and an improved margin.
Monitor capital expenditure levels as they increased from the prior quarter while revenue declined, which could pressure free cash flow if operating cash flow does not keep pace.