Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow margin remained stable compared to the same quarter one year earlier, while the absolute levels of revenue, operating cash flow, and free cash flow were all higher. Compared to the immediately preceding quarter, cash generation improved substantially, with free cash flow margin rising sharply as operating cash flow increased significantly.
- Revenue was higher than the prior year and the prior quarter, yet the operating cash flow and free cash flow were substantially higher than the prior quarter, resulting in a free cash flow margin that strengthened versus the prior quarter but was stable versus the prior year. Capital expenditure increased compared to both periods but was small relative to operating cash flow, allowing a high conversion rate.
- Compared to the immediately preceding quarter, revenue, operating cash flow, free cash flow, and free cash flow margin all improved. Compared to the same quarter one year earlier, revenue, operating cash flow, and free cash flow were higher, while free cash flow margin was stable.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$4.3B
Trailing twelve-month free cash flow.
Quarter free cash flow
$3.5B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$3.6B
Cash generated by operations before capital spending.
CapEx
$88.0M
Capital spending and related asset purchases.
FCF margin
58.2%
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 |
|---|---|---|---|---|---|
| 2022-07-31 | $2.4B | $339.0M | $11.0M | $328.0M | 13.6% |
| 2022-10-31 | $2.6B | $328.0M | $77.0M | $251.0M | 9.7% |
| 2023-01-31 | $3.0B | $284.0M | $55.0M | $229.0M | 7.5% |
| 2023-04-30 | $6.0B | $3.6B | $88.0M | $3.5B | 58.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 167.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.5% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$2.9B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Strong Operating Cash Flow Generation
Operating cash flow was significantly higher in the current quarter compared to both the prior quarter and the same quarter last year, supporting the increase in free cash flow. The free cash flow margin was high and stable versus the prior year.
The strong operating cash flow was the primary observable factor behind the higher free cash flow in the current quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher than the prior year and the prior quarter, yet the operating cash flow and free cash flow were substantially higher than the prior quarter, resulting in a free cash flow margin that strengthened versus the prior quarter but was stable versus the prior year. Capital expenditure increased compared to both periods but was small relative to operating cash flow, allowing a high conversion rate.
Compared to the immediately preceding quarter, revenue, operating cash flow, free cash flow, and free cash flow margin all improved. Compared to the same quarter one year earlier, revenue, operating cash flow, and free cash flow were higher, while free cash flow margin was stable.
Monitor whether operating cash flow remains at a level that sustains the strong conversion into free cash flow.