Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned negative this quarter as operating cash flow fell well below capital expenditure. Compared to the same quarter last year, free cash flow improved from a deeper negative position.
- Revenue conversion into cash was weak, with operating cash flow representing a low proportion of revenue, resulting in a negative free cash flow margin.
- Compared to the prior quarter, operating cash flow and free cash flow both weakened sharply, flipping free cash flow margin from positive to negative. Versus the same quarter last year, these metrics improved, as the prior year's free cash flow was even more negative.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.6B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$592.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$64.0M
Cash generated by operations before capital spending.
CapEx
$656.0M
Capital spending and related asset purchases.
FCF margin
-8.8%
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 |
|---|---|---|---|---|---|
| 2023-04-30 | $7.0B | $889.0M | $688.0M | $201.0M | 2.9% |
| 2023-07-31 | $7.0B | $1.5B | $671.0M | $854.0M | 12.2% |
| 2023-10-31 | $7.4B | $2.8B | $675.0M | $2.2B | 29.5% |
| 2024-01-31 | $6.8B | $64.0M | $656.0M | -$592.0M | -8.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -153.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 9.7% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$9.0B | 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 drop
The sharp decline in operating cash flow from the prior quarter was the main factor driving the swing in free cash flow from positive to negative, despite capital expenditure remaining relatively stable.
If operating cash flow does not improve, the company may face sustained cash consumption.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue conversion into cash was weak, with operating cash flow representing a low proportion of revenue, resulting in a negative free cash flow margin.
Compared to the prior quarter, operating cash flow and free cash flow both weakened sharply, flipping free cash flow margin from positive to negative. Versus the same quarter last year, these metrics improved, as the prior year's free cash flow was even more negative.
Monitor whether operating cash flow can recover sufficiently to cover capital expenditure in future quarters.