Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow margin weakened compared to both the prior quarter and the same quarter last year, driven by lower operating cash flow and higher capital expenditure. Revenue was relatively stable, but cash conversion declined.
- Revenue was broadly stable, but operating cash flow decreased, and capital expenditure rose, resulting in lower free cash flow and a narrower free cash flow margin.
- Compared to the prior quarter, free cash flow and margin were lower, with operating cash flow lower and capital expenditure higher. Versus the same quarter last year, free cash flow and margin were also lower, as operating cash flow declined and capital expenditure increased.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.1B
Trailing twelve-month free cash flow.
Quarter free cash flow
$413.4M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$751.6M
Cash generated by operations before capital spending.
CapEx
$338.2M
Capital spending and related asset purchases.
FCF margin
8.2%
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 |
|---|---|---|---|---|---|
| 2022-08-28 | $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% |
| 2023-05-28 | $5.0B | $751.6M | $338.2M | $413.4M | 8.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 67.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 6.7% | Lower capital intensity usually supports FCF margin. |
| Net cash | n/a | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Capital Expenditure Increase
Capital expenditure was higher in the current quarter compared to both the immediately preceding quarter and the same quarter one year earlier, contributing to the decline in free cash flow.
Higher capital expenditure reduced free cash flow and margin despite relatively stable revenue.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was broadly stable, but operating cash flow decreased, and capital expenditure rose, resulting in lower free cash flow and a narrower free cash flow margin.
Compared to the prior quarter, free cash flow and margin were lower, with operating cash flow lower and capital expenditure higher. Versus the same quarter last year, free cash flow and margin were also lower, as operating cash flow declined and capital expenditure increased.
Monitor the trend in capital expenditure, as it was higher in the current quarter compared to both the prior quarter and the year-ago quarter.