Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow was negative this quarter, driven by operating cash flow that was lower than capital expenditure. Revenue and operating cash flow both declined from the prior quarter and from the same quarter last year.
- Operating cash flow as a proportion of revenue weakened compared to both the prior quarter and the year-ago quarter, while capital expenditure remained elevated relative to revenue, resulting in a negative free cash flow margin.
- Compared to the prior quarter, revenue, operating cash flow, and free cash flow all decreased, and the free cash flow margin turned from positive to negative. Versus the same quarter last year, revenue was lower, operating cash flow was lower, and the free cash flow deficit widened.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$1.0B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$493.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$533.0M
Cash generated by operations before capital spending.
CapEx
$1.0B
Capital spending and related asset purchases.
FCF margin
-30.5%
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 |
|---|---|---|---|---|---|
| 2023-03-31 | $2.1B | $496.0M | $931.0M | -$435.0M | -21.1% |
| 2023-06-30 | $1.8B | $615.0M | $891.0M | -$276.0M | -15.7% |
| 2023-09-30 | $2.1B | $920.0M | $749.0M | $171.0M | 8.3% |
| 2023-12-31 | $1.6B | $533.0M | $1.0B | -$493.0M | -30.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -310.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 63.4% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$16.1B | 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 outpacing operating cash flow
Capital expenditure remained substantial while operating cash flow declined, causing free cash flow to turn negative. This pattern was the strongest observable driver of the quarter's cash conversion.
The negative free cash flow margin reflects that operating cash flow was insufficient to cover capital expenditure this quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a proportion of revenue weakened compared to both the prior quarter and the year-ago quarter, while capital expenditure remained elevated relative to revenue, resulting in a negative free cash flow margin.
Compared to the prior quarter, revenue, operating cash flow, and free cash flow all decreased, and the free cash flow margin turned from positive to negative. Versus the same quarter last year, revenue was lower, operating cash flow was lower, and the free cash flow deficit widened.
Monitor the relationship between capital expenditure and operating cash flow, as the gap widened this quarter.