Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
In the first quarter, free cash flow and its margin weakened sequentially and relative to the same quarter last year, despite a year-over-year revenue increase. Lower operating cash flow and higher capital expenditure combined to reduce cash conversion.
- Revenue was higher year-over-year but lower sequentially. Operating cash flow declined both compared to the prior quarter and the same quarter a year earlier. Capital expenditure decreased relative to the preceding quarter but increased versus the prior-year period, resulting in free cash flow that was lower on both comparisons and a free cash flow margin that narrowed accordingly.
- Compared to the immediately preceding quarter, all cash metrics—operating cash flow, capital expenditure, free cash flow, and margin—were lower. Versus the same quarter one year earlier, revenue improved, but operating cash flow edged lower while capital expenditure was higher, leaving free cash flow and margin weakened.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.0B
Trailing twelve-month free cash flow.
Quarter free cash flow
$236.4M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$378.1M
Cash generated by operations before capital spending.
CapEx
$141.7M
Capital spending and related asset purchases.
FCF margin
4.8%
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 |
|---|---|---|---|---|---|
| 2022-11-27 | $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% |
| 2023-08-27 | $4.9B | $378.1M | $141.7M | $236.4M | 4.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 35.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.9% | 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.
Timing of Accounts Payable
Filing text indicates that the decline in operating cash flow from the prior-year period was primarily driven by a change in the timing of accounts payable within current assets and liabilities, partly offset by higher net earnings excluding a prior-year divestiture gain.
The timing shift in payables represents a one-off working capital effect that may not recur, making operating cash flow less predictable in subsequent quarters.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher year-over-year but lower sequentially. Operating cash flow declined both compared to the prior quarter and the same quarter a year earlier. Capital expenditure decreased relative to the preceding quarter but increased versus the prior-year period, resulting in free cash flow that was lower on both comparisons and a free cash flow margin that narrowed accordingly.
Compared to the immediately preceding quarter, all cash metrics—operating cash flow, capital expenditure, free cash flow, and margin—were lower. Versus the same quarter one year earlier, revenue improved, but operating cash flow edged lower while capital expenditure was higher, leaving free cash flow and margin weakened.
The trajectory of capital expenditure, which rose year-over-year and remains a key use of cash, merits continued monitoring.