Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue decreased from both the prior quarter and the same quarter last year. Operating cash flow fell substantially and capital expenditure rose, resulting in negative free cash flow and a negative margin.
- Revenue declined while operating cash flow dropped more sharply, and capital expenditure increased, leading to a negative free cash flow margin. This reflects a significant weakening in cash conversion compared to earlier periods.
- Compared to the immediately preceding quarter, revenue, operating cash flow, and free cash flow all declined, with free cash flow turning from positive to negative. Versus the same quarter one year earlier, all metrics weakened, with free cash flow margin shifting from positive to negative.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$4.8B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$138.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$392.0M
Cash generated by operations before capital spending.
CapEx
$530.0M
Capital spending and related asset purchases.
FCF margin
-2.3%
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 |
|---|---|---|---|---|---|
| 2022-01-30 | $7.6B | $3.0B | $273.0M | $2.8B | 36.1% |
| 2022-05-01 | $8.3B | $1.7B | $361.0M | $1.4B | 16.5% |
| 2022-07-31 | $6.7B | $1.3B | $433.0M | $837.0M | 12.5% |
| 2022-10-30 | $5.9B | $392.0M | $530.0M | -$138.0M | -2.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -20.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 8.9% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$8.2B | 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 decline
Operating cash flow decreased more than revenue, while capital expenditure increased, causing free cash flow to turn negative.
The company generated negative free cash flow this quarter, a reversal from prior periods.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue declined while operating cash flow dropped more sharply, and capital expenditure increased, leading to a negative free cash flow margin. This reflects a significant weakening in cash conversion compared to earlier periods.
Compared to the immediately preceding quarter, revenue, operating cash flow, and free cash flow all declined, with free cash flow turning from positive to negative. Versus the same quarter one year earlier, all metrics weakened, with free cash flow margin shifting from positive to negative.
Monitor the trajectory of operating cash flow, particularly the effects of tax payments and the Arm termination cost as noted in the filing.