Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue and free cash flow increased compared to both the prior quarter and the same quarter last year. The free cash flow margin strengthened significantly.
- Operating cash flow rose sharply, driving a substantial increase in free cash flow despite a modest rise in capital expenditures. The free cash flow margin expanded accordingly.
- Sequentially, revenue and operating cash flow improved, leading to higher free cash flow and margin. On a year-over-year basis, revenue was stable but operating cash flow and free cash flow were higher, with margin improvement.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$12.0B
Trailing twelve-month free cash flow.
Quarter free cash flow
$8.3B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$13.1B
Cash generated by operations before capital spending.
CapEx
$4.8B
Capital spending and related asset purchases.
FCF margin
5.1%
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 |
|---|---|---|---|---|---|
| 2022-04-30 | $140.3B | -$3.8B | $3.5B | -$7.3B | -5.2% |
| 2022-07-31 | $151.4B | $13.0B | $4.0B | $9.0B | 6.0% |
| 2022-10-31 | $151.5B | $6.5B | $4.6B | $1.9B | 1.2% |
| 2023-01-31 | $162.7B | $13.1B | $4.8B | $8.3B | 5.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 133.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.9% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$30.2B | 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 significantly both sequentially and year over year, reflecting higher cash generation from operations.
This was the primary driver of the improved free cash flow and margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow rose sharply, driving a substantial increase in free cash flow despite a modest rise in capital expenditures. The free cash flow margin expanded accordingly.
Sequentially, revenue and operating cash flow improved, leading to higher free cash flow and margin. On a year-over-year basis, revenue was stable but operating cash flow and free cash flow were higher, with margin improvement.
Monitor the trajectory of operating cash flow given the impact of legal settlements and restructuring charges noted in the filing.