Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow contracted year over year and fell sharply from the preceding quarter, driven by a lower operating cash flow and higher capital spending. The free cash flow margin narrowed, reflecting a weakened cash conversion profile despite stable revenue.
- Revenue held roughly steady sequentially and was higher year over year, but operating cash flow declined markedly from the prior quarter and rose only slightly from the year-ago period. Capital expenditure increased both sequentially and year over year, pulling free cash flow lower and compressing the free cash flow margin.
- Compared to the immediately preceding quarter, free cash flow decreased substantially as operating cash flow weakened and capital expenditure rose. Versus the same quarter one year earlier, free cash flow also declined, driven by higher capital spending that more than offset a modest improvement in operating cash flow.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$973.7M
Trailing twelve-month free cash flow.
Quarter free cash flow
$28.9M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$123.9M
Cash generated by operations before capital spending.
CapEx
$95.0M
Capital spending and related asset purchases.
FCF margin
1.1%
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 |
|---|---|---|---|---|---|
| 2022-10-29 | $2.3B | $32.8M | $83.5M | -$50.7M | -2.2% |
| 2023-01-28 | $3.2B | $908.5M | $108.2M | $800.3M | 24.8% |
| 2023-04-29 | $2.6B | $304.9M | $109.8M | $195.1M | 7.4% |
| 2023-07-29 | $2.5B | $123.9M | $95.0M | $28.9M | 1.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 9.6% | 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.
Capital Expenditure Pressure
Capital expenditure rose from the prior quarter and was significantly higher than a year ago, absorbing a larger portion of operating cash flow and compressing free cash flow despite relatively stable revenue.
Higher capital outlays were the strongest observable driver of the decline in free cash flow and the narrowing of the free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue held roughly steady sequentially and was higher year over year, but operating cash flow declined markedly from the prior quarter and rose only slightly from the year-ago period. Capital expenditure increased both sequentially and year over year, pulling free cash flow lower and compressing the free cash flow margin.
Compared to the immediately preceding quarter, free cash flow decreased substantially as operating cash flow weakened and capital expenditure rose. Versus the same quarter one year earlier, free cash flow also declined, driven by higher capital spending that more than offset a modest improvement in operating cash flow.
Monitor capital expenditure levels, as the increase in spending relative to both the prior quarter and the year-ago period was the strongest observable factor in the cash flow decline.