Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow improved versus the prior quarter but weakened compared to the same quarter last year. The cash conversion rate rose from the preceding quarter, driven by higher operating cash flow relative to revenue.
- Revenue increased while operating cash flow grew at a faster pace than the prior quarter, leading to a higher free cash flow margin. Capital expenditure was slightly lower than the previous quarter but higher than a year ago.
- Compared to the immediately preceding quarter, free cash flow and margin both improved. Versus the same quarter one year earlier, free cash flow and margin were lower, despite higher revenue.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.2B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.1B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.6B
Cash generated by operations before capital spending.
CapEx
$516.8M
Capital spending and related asset purchases.
FCF margin
12.4%
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 |
|---|---|---|---|---|---|
| 2022-04-03 | $7.6B | $161.9M | $455.1M | -$293.2M | -3.8% |
| 2022-07-03 | $8.2B | $1.3B | $423.5M | $841.3M | 10.3% |
| 2022-10-02 | $8.4B | $1.1B | $545.9M | $553.8M | 6.6% |
| 2023-01-01 | $8.7B | $1.6B | $516.8M | $1.1B | 12.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 125.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 5.9% | 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.
Operating Cash Flow Growth
Operating cash flow increased from the prior quarter, contributing to a higher free cash flow margin. This was the strongest observable driver of the quarter's cash conversion improvement.
The rise in operating cash flow relative to revenue supported a stronger free cash flow margin compared to the prior quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased while operating cash flow grew at a faster pace than the prior quarter, leading to a higher free cash flow margin. Capital expenditure was slightly lower than the previous quarter but higher than a year ago.
Compared to the immediately preceding quarter, free cash flow and margin both improved. Versus the same quarter one year earlier, free cash flow and margin were lower, despite higher revenue.
Monitor the trend in capital expenditure relative to operating cash flow, as it was higher year-over-year while free cash flow declined.