Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue declined while operating cash flow improved, leading to higher free cash flow and a stronger margin versus the prior quarter. Compared to the same quarter last year, operating cash flow increased moderately, but higher capital spending resulted in lower free cash flow and margin.
- Operating cash flow exceeded revenue, indicating efficient cash conversion relative to revenue. After deducting lower capital expenditure, free cash flow remained substantial, with the margin expanding versus both the prior quarter and the same quarter last year, though year-over-year margin narrowed.
- Compared to the immediately preceding quarter, revenue was lower but operating cash flow improved and capital expenditure declined, producing higher free cash flow and a stronger margin. Versus the same quarter one year earlier, revenue was higher, operating cash flow improved slightly, and capital expenditure decreased modestly, yet free cash flow and margin were both lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$9.5B
Trailing twelve-month free cash flow.
Quarter free cash flow
$5.7B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$7.0B
Cash generated by operations before capital spending.
CapEx
$1.3B
Capital spending and related asset purchases.
FCF margin
45.5%
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 |
|---|---|---|---|---|---|
| 2022-11-30 | $12.3B | $849.0M | $2.4B | -$1.6B | -12.9% |
| 2023-02-28 | $12.4B | $4.3B | $2.6B | $1.6B | 13.3% |
| 2023-05-31 | $13.8B | $5.6B | $1.9B | $3.7B | 27.0% |
| 2023-08-31 | $12.5B | $7.0B | $1.3B | $5.7B | 45.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 233.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 10.6% | Lower capital intensity usually supports FCF margin. |
| Net cash | n/a | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Capital Expenditure Reduction
Capital expenditure decreased compared to both the prior quarter and the same quarter last year, allowing free cash flow to increase sequentially despite lower revenue. This was the strongest observable driver of the quarter's free cash flow improvement.
Lower capital spending directly boosted free cash flow and margin in the current quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow exceeded revenue, indicating efficient cash conversion relative to revenue. After deducting lower capital expenditure, free cash flow remained substantial, with the margin expanding versus both the prior quarter and the same quarter last year, though year-over-year margin narrowed.
Compared to the immediately preceding quarter, revenue was lower but operating cash flow improved and capital expenditure declined, producing higher free cash flow and a stronger margin. Versus the same quarter one year earlier, revenue was higher, operating cash flow improved slightly, and capital expenditure decreased modestly, yet free cash flow and margin were both lower.
Monitor the trend in capital expenditure relative to operating cash flow, as its decline was a key factor in the sequential free cash flow improvement.