Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow remained negative but improved significantly compared to the prior quarter. The improvement came from higher operating cash flow, while capital expenditure increased modestly.
- Revenue increased, and operating cash flow improved more than proportionally, leading to a higher cash conversion rate. However, capital expenditure remained elevated, keeping free cash flow negative and the free cash flow margin weakened relative to the prior year.
- Compared to the prior quarter, free cash flow and free cash flow margin both improved due to higher operating cash flow. Versus the same quarter last year, free cash flow worsened and the margin declined, driven by a substantial increase in capital expenditure.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$3.8B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$777.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.1B
Cash generated by operations before capital spending.
CapEx
$1.9B
Capital spending and related asset purchases.
FCF margin
-22.6%
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 |
|---|---|---|---|---|---|
| 2022-12-31 | $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% |
| 2023-09-30 | $3.4B | $1.1B | $1.9B | -$777.0M | -22.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -336.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 55.3% | 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.
Improvement in Cash from Operations
Operating cash flow increased compared to both the prior quarter and the same quarter last year, outpacing revenue growth. This was the strongest observable driver of the quarter's free cash flow improvement.
Higher operating cash flow narrowed the negative free cash flow and improved the free cash flow margin from the prior quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased, and operating cash flow improved more than proportionally, leading to a higher cash conversion rate. However, capital expenditure remained elevated, keeping free cash flow negative and the free cash flow margin weakened relative to the prior year.
Compared to the prior quarter, free cash flow and free cash flow margin both improved due to higher operating cash flow. Versus the same quarter last year, free cash flow worsened and the margin declined, driven by a substantial increase in capital expenditure.
Monitor the trajectory of capital expenditure, as it has grown materially year over year and remains the primary factor limiting free cash flow generation.