Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue increased compared to both the prior quarter and the same quarter last year, but free cash flow and free cash flow margin declined sharply. Operating cash flow decreased relative to the previous quarter and was slightly below the year-ago level, while capital expenditure was higher than both periods.
- Revenue was higher, yet operating cash flow fell, reflecting a weaker conversion of revenue into cash. The combination of lower operating cash flow and higher capital expenditure led to a lower free cash flow and a narrower free cash flow margin.
- Compared to the prior quarter, free cash flow nearly halved and the margin dropped sharply, driven by a substantial decline in operating cash flow alongside higher capital expenditure. Versus the same quarter last year, free cash flow was lower and the margin weakened, as operating cash flow decreased despite revenue growth.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$7.9B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.4B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.7B
Cash generated by operations before capital spending.
CapEx
$361.0M
Capital spending and related asset purchases.
FCF margin
16.5%
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 |
|---|---|---|---|---|---|
| 2021-08-01 | $6.5B | $2.7B | $183.0M | $2.5B | 38.4% |
| 2021-10-31 | $7.1B | $1.5B | $222.0M | $1.3B | 18.3% |
| 2022-01-30 | $7.6B | $3.0B | $273.0M | $2.8B | 36.1% |
| 2022-05-01 | $8.3B | $1.7B | $361.0M | $1.4B | 16.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 84.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 4.4% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$7.1B | 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 Reduction
Operating cash flow declined compared to both the prior quarter and the year-ago period, despite higher revenue. The filing attributes part of this decrease to advanced payments on supply agreements.
The drop in operating cash flow, combined with higher capital expenditure, caused free cash flow margin to weaken substantially.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher, yet operating cash flow fell, reflecting a weaker conversion of revenue into cash. The combination of lower operating cash flow and higher capital expenditure led to a lower free cash flow and a narrower free cash flow margin.
Compared to the prior quarter, free cash flow nearly halved and the margin dropped sharply, driven by a substantial decline in operating cash flow alongside higher capital expenditure. Versus the same quarter last year, free cash flow was lower and the margin weakened, as operating cash flow decreased despite revenue growth.
Monitor operating cash flow trends, as the filing notes that advanced payments on supply agreements contributed to the decrease in cash from operations.