Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow was deeply negative in the quarter, driven by a large operating cash outflow. Revenue improved relative to the year-ago quarter, but cash conversion weakened sharply.
- Revenue increased compared to the prior quarter, yet operating cash flow turned from a small inflow to a large outflow, causing free cash flow and free cash flow margin to remain negative and worsen sequentially.
- Compared to the immediately preceding quarter, revenue was lower and operating cash flow weakened from a small positive to a negative figure. Versus the same quarter one year earlier, revenue was higher, operating cash flow was more negative, and free cash flow margin was more negative.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.6B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$1.9B
Free cash flow in the selected fiscal quarter.
Operating cash flow
-$1.6B
Cash generated by operations before capital spending.
CapEx
$327.0M
Capital spending and related asset purchases.
FCF margin
-8.0%
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 |
|---|---|---|---|---|---|
| 2022-06-30 | $27.3B | $531.0M | $283.0M | $248.0M | 0.9% |
| 2022-09-30 | $24.7B | $4.0B | $341.0M | $3.7B | 14.9% |
| 2022-12-31 | $25.9B | $130.0M | $478.0M | -$348.0M | -1.3% |
| 2023-03-31 | $24.1B | -$1.6B | $327.0M | -$1.9B | -8.0% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -165.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.4% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$7.8B | 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 Reversal
Operating cash flow dropped from a positive amount in the prior quarter to a large negative figure this quarter, more than offsetting a reduction in capital expenditure. This drove free cash flow deeper into negative territory.
The operating cash flow swing was the strongest observable driver of the free cash flow deterioration this quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased compared to the prior quarter, yet operating cash flow turned from a small inflow to a large outflow, causing free cash flow and free cash flow margin to remain negative and worsen sequentially.
Compared to the immediately preceding quarter, revenue was lower and operating cash flow weakened from a small positive to a negative figure. Versus the same quarter one year earlier, revenue was higher, operating cash flow was more negative, and free cash flow margin was more negative.
Monitor whether operating cash flow can return to positive territory in the coming quarter, as it has been the primary swing factor in free cash flow.