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 rose sharply versus the prior quarter and the same quarter last year. Free cash flow margin improved markedly, reflecting stronger cash generation relative to revenue.
- Operating cash flow as a proportion of revenue was higher than both the preceding quarter and the year-ago quarter, while capital expenditure remained relatively stable. This resulted in a free cash flow margin that was higher sequentially and substantially higher year over year.
- Compared to the immediately preceding quarter, revenue, operating cash flow, and free cash flow were all higher, and the free cash flow margin improved. Versus the same quarter one year earlier, all metrics were higher, with free cash flow margin showing a notable increase.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$10.3B
Trailing twelve-month free cash flow.
Quarter free cash flow
$6.1B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$6.3B
Cash generated by operations before capital spending.
CapEx
$289.0M
Capital spending and related asset purchases.
FCF margin
44.9%
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 |
|---|---|---|---|---|---|
| 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% |
| 2023-07-30 | $13.5B | $6.3B | $289.0M | $6.1B | 44.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 97.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.1% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$3.9B | 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 Growth
Operating cash flow increased substantially from both the prior quarter and the year-ago quarter, outpacing the growth in revenue. This was the strongest observable driver of the free cash flow improvement.
Higher operating cash flow directly lifted free cash flow and margin, despite a modest increase in capital expenditure.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a proportion of revenue was higher than both the preceding quarter and the year-ago quarter, while capital expenditure remained relatively stable. This resulted in a free cash flow margin that was higher sequentially and substantially higher year over year.
Compared to the immediately preceding quarter, revenue, operating cash flow, and free cash flow were all higher, and the free cash flow margin improved. Versus the same quarter one year earlier, all metrics were higher, with free cash flow margin showing a notable increase.
Monitor the trend in accounts receivable, as the filing notes that higher receivables partially offset operating cash flow improvements.