Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Cash conversion weakened sequentially and compared to the same quarter one year earlier, as free cash flow margin declined. Revenue was lower than the preceding quarter but higher than the year-ago quarter, while capital expenditure increased in both comparisons.
- The current quarter's operating cash flow was higher than the year-ago level but lower than the preceding quarter. Capital expenditure was higher than both prior periods, resulting in free cash flow that was lower than both the preceding quarter and the year-ago quarter. The free cash flow margin was lower than both prior periods.
- Compared to the preceding quarter, revenue was lower, operating cash flow was lower, capital expenditure was higher, and free cash flow was lower, resulting in a weakened cash conversion. Compared to the same quarter one year earlier, revenue was higher, operating cash flow was higher, but capital expenditure was higher, leading to a lower free cash flow and margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$5.1B
Trailing twelve-month free cash flow.
Quarter free cash flow
$466.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$986.0M
Cash generated by operations before capital spending.
CapEx
$520.0M
Capital spending and related asset purchases.
FCF margin
5.9%
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 |
|---|---|---|---|---|---|
| 2023-10-27 | $8.0B | $661.0M | $461.0M | $200.0M | 2.5% |
| 2024-01-26 | $8.1B | $2.5B | $346.0M | $2.1B | 26.3% |
| 2024-04-26 | $8.6B | $2.8B | $426.0M | $2.4B | 27.4% |
| 2024-07-26 | $7.9B | $986.0M | $520.0M | $466.0M | 5.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 44.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 6.6% | 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 conversion
Operating cash flow was lower than the preceding quarter despite a smaller decline in revenue, and while higher than the year-ago quarter, the increase was outpaced by capital expenditure growth. This shift constrained free cash flow generation, resulting in a lower free cash flow margin than both comparable periods.
This shift constrained free cash flow generation, resulting in a lower free cash flow margin than both comparable periods.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
The current quarter's operating cash flow was higher than the year-ago level but lower than the preceding quarter. Capital expenditure was higher than both prior periods, resulting in free cash flow that was lower than both the preceding quarter and the year-ago quarter. The free cash flow margin was lower than both prior periods.
Compared to the preceding quarter, revenue was lower, operating cash flow was lower, capital expenditure was higher, and free cash flow was lower, resulting in a weakened cash conversion. Compared to the same quarter one year earlier, revenue was higher, operating cash flow was higher, but capital expenditure was higher, leading to a lower free cash flow and margin.
Monitor the trend in capital expenditure relative to operating cash flow, as it increased in both comparisons while free cash flow declined.