Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow and operating cash flow improved compared to both the prior quarter and the same quarter last year, supported by higher revenue year-over-year and modest capital expenditure. Cash conversion strengthened as free cash flow margin rose relative to both comparison periods.
- Operating cash flow increased relative to both the preceding quarter and the year-ago quarter, while capital expenditure was lower than the prior quarter and broadly stable compared to last year. This combination drove free cash flow higher and lifted the free cash flow margin above both comparison periods.
- Compared to the immediately preceding quarter, revenue was slightly lower but operating cash flow improved and capital expenditure declined, resulting in higher free cash flow and an improved margin. Versus the same quarter one year earlier, revenue was higher and operating cash flow strengthened, while capital expenditure remained similar, again producing higher free cash flow and a better margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.5B
Trailing twelve-month free cash flow.
Quarter free cash flow
$701.7M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$826.3M
Cash generated by operations before capital spending.
CapEx
$124.6M
Capital spending and related asset purchases.
FCF margin
13.7%
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 |
|---|---|---|---|---|---|
| 2022-05-29 | $4.9B | $1.1B | $218.1M | $869.9M | 17.8% |
| 2022-08-28 | $4.7B | $388.8M | $90.9M | $297.9M | 6.3% |
| 2022-11-27 | $5.2B | $811.9M | $135.8M | $676.1M | 13.0% |
| 2023-02-26 | $5.1B | $826.3M | $124.6M | $701.7M | 13.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 126.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.4% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$10.0B | 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 compared to both the prior quarter and the year-ago period, even as revenue was slightly lower sequentially. The company's filing attributes nine-month operating cash flow trends to inventory levels and income tax payments, but the quarter itself showed a stronger cash conversion.
The higher operating cash flow was the primary factor behind the improvement in free cash flow and margin for the quarter.
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 preceding quarter and the year-ago quarter, while capital expenditure was lower than the prior quarter and broadly stable compared to last year. This combination drove free cash flow higher and lifted the free cash flow margin above both comparison periods.
Compared to the immediately preceding quarter, revenue was slightly lower but operating cash flow improved and capital expenditure declined, resulting in higher free cash flow and an improved margin. Versus the same quarter one year earlier, revenue was higher and operating cash flow strengthened, while capital expenditure remained similar, again producing higher free cash flow and a better margin.
Monitor revenue trends as the slight sequential decline could pressure future cash flow if operating cash flow does not continue to offset lower revenue.