Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue and operating cash flow both improved versus the prior quarter, while free cash flow margin strengthened. Compared to the same quarter last year, revenue was lower but cash generation metrics were significantly higher.
- Operating cash flow exceeded capital expenditure by a wide margin, resulting in a free cash flow margin that was higher than both the prior quarter and the year-ago quarter. The conversion from revenue to free cash flow was notably stronger this quarter.
- Compared to the immediately preceding quarter, revenue, operating cash flow, and free cash flow all increased, while capital expenditure decreased. Versus the same quarter one year earlier, revenue was lower, but operating cash flow, free cash flow, and free cash flow margin were all higher.
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
$2.7B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$2.9B
Cash generated by operations before capital spending.
CapEx
$248.0M
Capital spending and related asset purchases.
FCF margin
37.0%
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 |
|---|---|---|---|---|---|
| 2022-07-31 | $6.7B | $1.3B | $433.0M | $837.0M | 12.5% |
| 2022-10-30 | $5.9B | $392.0M | $530.0M | -$138.0M | -2.3% |
| 2023-01-29 | $6.1B | $2.2B | $509.0M | $1.7B | 28.7% |
| 2023-04-30 | $7.2B | $2.9B | $248.0M | $2.7B | 37.0% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 130.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.4% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$5.9B | 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 Strength
Operating cash flow was the strongest observable driver, increasing from both the prior quarter and the year-ago quarter. The filing notes that the increase in operating cash flow versus the year-ago quarter was primarily due to lower inventory prepayments and changes in inventory, partially offset by lower revenue.
Higher operating cash flow directly supported the improvement in free cash flow and free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow exceeded capital expenditure by a wide margin, resulting in a free cash flow margin that was higher than both the prior quarter and the year-ago quarter. The conversion from revenue to free cash flow was notably stronger this quarter.
Compared to the immediately preceding quarter, revenue, operating cash flow, and free cash flow all increased, while capital expenditure decreased. Versus the same quarter one year earlier, revenue was lower, but operating cash flow, free cash flow, and free cash flow margin were all higher.
Monitor the trend in capital expenditure, which declined from both the prior quarter and the year-ago quarter.