Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Cash conversion improved from the prior quarter, turning free cash flow positive, but the margin remained below the year-ago level. Revenue declined compared to both the previous quarter and the same quarter last year.
- Revenue was lower than both the prior quarter and the year-ago quarter, while operating cash flow rose sharply from the prior quarter but fell short of the year-ago level. Capital expenditure decreased from the prior quarter and was slightly higher than the year-ago quarter, resulting in positive free cash flow and margin versus a negative margin in the prior quarter.
- Compared to the immediately preceding quarter, free cash flow shifted from negative to positive, driven by higher operating cash flow and lower capital expenditure. Relative to the same quarter one year earlier, free cash flow and margin weakened due to lower operating cash flow and slightly higher capital expenditure.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$5.9B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.7B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$2.1B
Cash generated by operations before capital spending.
CapEx
$380.0M
Capital spending and related asset purchases.
FCF margin
7.7%
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 |
|---|---|---|---|---|---|
| 2022-07-29 | $27.5B | $3.0B | $344.0M | $2.7B | 9.8% |
| 2022-10-28 | $23.5B | $2.1B | $403.0M | $1.7B | 7.3% |
| 2023-02-03 | $22.4B | $451.0M | $739.0M | -$288.0M | -1.3% |
| 2023-05-05 | $22.3B | $2.1B | $380.0M | $1.7B | 7.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 76.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.7% | 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.
Operating cash flow improvement
Operating cash flow increased substantially from the prior quarter, reversing the negative free cash flow position. This was the primary observable factor in the quarter's cash conversion improvement.
The rise in operating cash flow relative to the prior quarter was the strongest contributor to free cash flow turning positive.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was lower than both the prior quarter and the year-ago quarter, while operating cash flow rose sharply from the prior quarter but fell short of the year-ago level. Capital expenditure decreased from the prior quarter and was slightly higher than the year-ago quarter, resulting in positive free cash flow and margin versus a negative margin in the prior quarter.
Compared to the immediately preceding quarter, free cash flow shifted from negative to positive, driven by higher operating cash flow and lower capital expenditure. Relative to the same quarter one year earlier, free cash flow and margin weakened due to lower operating cash flow and slightly higher capital expenditure.
Revenue trends across both sequential and year-over-year comparisons, as revenue declined in both periods.