Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
In the current quarter, free cash flow was negative and the margin weakened compared to both the prior-year quarter and the year-ago quarter. The decline was driven by higher capital expenditure despite an increase in operating cash flow relative to the year-ago period.
- Revenue decreased compared to the prior-year quarter but increased relative to the year-ago quarter. Operating cash flow followed a similar pattern, while capital expenditure rose significantly, resulting in a more negative free cash flow and a lower margin.
- Relative to the prior-year quarter, revenue and operating cash flow were lower, capital expenditure was higher, and free cash flow was more negative. Compared to the year-ago quarter, revenue and operating cash flow improved, but capital expenditure increased substantially, leading to a weaker free cash flow position.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$3.3B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$1.3B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$562.0M
Cash generated by operations before capital spending.
CapEx
$1.8B
Capital spending and related asset purchases.
FCF margin
-42.4%
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 |
|---|---|---|---|---|---|
| 2022-09-30 | $3.6B | $784.0M | $1.1B | -$268.0M | -7.4% |
| 2022-12-31 | $3.1B | $1.1B | $1.8B | -$774.0M | -25.3% |
| 2023-03-31 | $3.2B | $625.0M | $1.6B | -$926.0M | -28.6% |
| 2023-06-30 | $3.0B | $562.0M | $1.8B | -$1.3B | -42.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 3289.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 61.0% | 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 Growth
Capital expenditure was higher compared to both the prior-year and year-ago quarters, outpacing the changes in operating cash flow.
The higher capital expenditure was the primary factor behind the deterioration in free cash flow and margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue decreased compared to the prior-year quarter but increased relative to the year-ago quarter. Operating cash flow followed a similar pattern, while capital expenditure rose significantly, resulting in a more negative free cash flow and a lower margin.
Relative to the prior-year quarter, revenue and operating cash flow were lower, capital expenditure was higher, and free cash flow was more negative. Compared to the year-ago quarter, revenue and operating cash flow improved, but capital expenditure increased substantially, leading to a weaker free cash flow position.
Monitor the level of capital expenditure relative to operating cash flow, as the gap has widened.