Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned strongly positive this quarter, reversing the prior quarter's deficit and exceeding the year-ago level. The improvement was driven by higher operating cash flow while capital expenditure remained moderate.
- Revenue was higher than both the prior quarter and the same quarter last year. Operating cash flow increased significantly relative to revenue, while capital expenditure declined sequentially, leading to a free cash flow margin that improved versus both comparison periods.
- Compared to the prior quarter, free cash flow improved markedly from a deficit to a surplus, with operating cash flow more than offsetting a reduction in capital expenditure. Versus the same quarter last year, free cash flow was higher, supported by a small increase in revenue and a larger increase in operating cash flow.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$1.5B
Trailing twelve-month free cash flow.
Quarter free cash flow
$2.3B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$3.5B
Cash generated by operations before capital spending.
CapEx
$1.2B
Capital spending and related asset purchases.
FCF margin
7.2%
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 |
|---|---|---|---|---|---|
| 2022-04-30 | $25.2B | -$1.4B | $952.0M | -$2.3B | -9.3% |
| 2022-07-30 | $26.0B | $1.3B | $1.6B | -$224.0M | -0.9% |
| 2022-10-29 | $26.5B | $599.0M | $1.8B | -$1.2B | -4.5% |
| 2023-01-28 | $31.4B | $3.5B | $1.2B | $2.3B | 7.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 258.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.8% | 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 Recovery
Operating cash flow increased substantially from the prior quarter and was higher than the year-ago period, providing the primary lift to free cash flow.
This recovery enabled a swing from negative to positive free cash flow and a higher margin compared to both prior periods.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher than both the prior quarter and the same quarter last year. Operating cash flow increased significantly relative to revenue, while capital expenditure declined sequentially, leading to a free cash flow margin that improved versus both comparison periods.
Compared to the prior quarter, free cash flow improved markedly from a deficit to a surplus, with operating cash flow more than offsetting a reduction in capital expenditure. Versus the same quarter last year, free cash flow was higher, supported by a small increase in revenue and a larger increase in operating cash flow.
Monitor whether capital expenditure remains contained relative to operating cash flow to sustain the positive free cash flow margin.