Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
The quarter posted negative free cash flow and a deeply negative margin, driven by operating cash flow that was far outstripped by capital expenditure. Compared to the prior quarter and the same quarter a year ago, cash conversion weakened substantially.
- Revenue grew while operating cash flow declined, resulting in a free cash flow that was significantly more negative than both the preceding quarter and the year-ago quarter. The free cash flow margin worsened, reflecting a higher capital expenditure relative to operating cash flow.
- Compared to the immediately preceding quarter, operating cash flow was lower and capital expenditure was slightly lower, but free cash flow became more negative. Versus the same quarter one year earlier, operating cash flow was lower while capital expenditure was much higher, causing a much deeper negative free cash flow.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$5.6B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$1.9B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$287.0M
Cash generated by operations before capital spending.
CapEx
$2.1B
Capital spending and related asset purchases.
FCF margin
-60.3%
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 |
|---|---|---|---|---|---|
| 2023-06-30 | $3.0B | $562.0M | $1.8B | -$1.3B | -42.4% |
| 2023-09-30 | $3.4B | $1.1B | $1.9B | -$777.0M | -22.6% |
| 2023-12-31 | $3.0B | $725.0M | $2.4B | -$1.7B | -57.4% |
| 2024-03-31 | $3.1B | $287.0M | $2.1B | -$1.9B | -60.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -430.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 69.6% | 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 Far Exceeds Operating Cash Flow
Capital expenditure was substantially higher than operating cash flow, leading to a deeply negative free cash flow. This relationship was the strongest observable driver of the quarter's cash conversion outcome.
The magnitude of capital expenditure relative to operating cash flow is the primary factor behind the negative free cash flow and weakened margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue grew while operating cash flow declined, resulting in a free cash flow that was significantly more negative than both the preceding quarter and the year-ago quarter. The free cash flow margin worsened, reflecting a higher capital expenditure relative to operating cash flow.
Compared to the immediately preceding quarter, operating cash flow was lower and capital expenditure was slightly lower, but free cash flow became more negative. Versus the same quarter one year earlier, operating cash flow was lower while capital expenditure was much higher, causing a much deeper negative free cash flow.
Monitor the trend of capital expenditure relative to operating cash flow, as the gap widened considerably this quarter.