Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was slightly higher than the same quarter a year earlier and higher than the prior quarter. Operating cash flow and free cash flow turned positive from negative in the prior quarter and were higher than the year-ago quarter, with the free cash flow margin improving significantly compared to both periods.
- Strong operating cash flow combined with lower capital expenditure relative to the prior quarter and the year-ago quarter resulted in a high free cash flow margin. The conversion from revenue to operating cash flow was robust, driving a substantial free cash flow after capital spending.
- Operating cash flow and free cash flow were higher than both the immediately preceding quarter and the same quarter one year earlier. Free cash flow margin improved from negative to positive versus the prior quarter and was higher than the year-ago quarter.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$6.3B
Trailing twelve-month free cash flow.
Quarter free cash flow
$2.6B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$2.8B
Cash generated by operations before capital spending.
CapEx
$205.0M
Capital spending and related asset purchases.
FCF margin
19.5%
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 |
|---|---|---|---|---|---|
| 2023-02-28 | $12.4B | $2.2B | $200.0M | $2.0B | 16.4% |
| 2023-05-31 | $12.8B | $2.3B | $269.0M | $2.0B | 15.5% |
| 2023-08-31 | $12.9B | -$66.0M | $253.0M | -$319.0M | -2.5% |
| 2023-11-30 | $13.4B | $2.8B | $205.0M | $2.6B | 19.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 165.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.5% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$1.0B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Working Capital Improvement
According to the filing, the favorable change in working capital was primarily driven by reduced inventory purchases and improved lead times, which contributed to the increased operating cash flow.
This improvement was a key factor in the swing from negative to positive free cash flow and the higher free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Strong operating cash flow combined with lower capital expenditure relative to the prior quarter and the year-ago quarter resulted in a high free cash flow margin. The conversion from revenue to operating cash flow was robust, driving a substantial free cash flow after capital spending.
Operating cash flow and free cash flow were higher than both the immediately preceding quarter and the same quarter one year earlier. Free cash flow margin improved from negative to positive versus the prior quarter and was higher than the year-ago quarter.
Monitor the sustainability of the working capital improvements, particularly inventory levels and lead times, as cited in the filing.