Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow margin was higher than both the preceding quarter and the year-ago quarter. The improvement was supported by stronger operating cash flow relative to revenue, with capital expenditure remaining at a similar level.
- Revenue was higher compared to both the prior quarter and the year-ago quarter. Operating cash flow increased more than proportionally, and capital expenditure remained relatively stable, resulting in a higher free cash flow and an improved free cash flow margin.
- Compared to the previous quarter, all key metrics improved. Compared to the year-ago quarter, revenue and operating cash flow were higher, while capital expenditure was lower, and free cash flow and margin were higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$4.6B
Trailing twelve-month free cash flow.
Quarter free cash flow
$2.1B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$2.5B
Cash generated by operations before capital spending.
CapEx
$378.0M
Capital spending and related asset purchases.
FCF margin
24.4%
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 | $7.4B | $1.1B | $426.0M | $657.0M | 8.9% |
| 2022-10-28 | $7.6B | $922.0M | $323.0M | $599.0M | 7.9% |
| 2023-01-27 | $7.7B | $1.6B | $332.0M | $1.2B | 16.1% |
| 2023-04-28 | $8.5B | $2.5B | $378.0M | $2.1B | 24.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 176.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 4.4% | 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 grew at a faster pace than revenue, resulting in a higher free cash flow margin. Capital expenditure remained relatively stable, enabling the additional operating cash flow to convert into free cash flow.
This driver was the primary observable factor behind the free cash flow margin expansion compared to both the prior quarter and the year-ago quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher compared to both the prior quarter and the year-ago quarter. Operating cash flow increased more than proportionally, and capital expenditure remained relatively stable, resulting in a higher free cash flow and an improved free cash flow margin.
Compared to the previous quarter, all key metrics improved. Compared to the year-ago quarter, revenue and operating cash flow were higher, while capital expenditure was lower, and free cash flow and margin were higher.
Per the management discussion, the company's liquidity is considered strong, but the evolution of capital expenditure relative to operating cash flow remains a point to monitor.