Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue declined from the prior quarter but rose versus the same quarter last year. Free cash flow turned negative as operating cash flow weakened sharply and capital expenditure increased.
- Operating cash flow as a percentage of revenue was lower than the prior quarter, reflecting a weaker conversion of sales into cash. Combined with higher capital expenditure, free cash flow margin turned negative.
- Compared to the prior quarter, revenue was lower and operating cash flow decreased substantially, while capital expenditure rose. Free cash flow shifted from positive to negative. Versus the same quarter last year, revenue was higher and operating cash flow improved from negative to positive, but capital expenditure also increased, resulting in a slightly less negative free cash flow.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$968.5M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$430.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$73.7M
Cash generated by operations before capital spending.
CapEx
$503.7M
Capital spending and related asset purchases.
FCF margin
-18.1%
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 | $2.1B | $895.3M | $313.3M | $582.0M | 27.8% |
| 2022-12-31 | $2.6B | $956.8M | $445.7M | $511.1M | 19.5% |
| 2023-03-31 | $2.6B | $721.0M | $415.6M | $305.4M | 11.8% |
| 2023-06-30 | $2.4B | $73.7M | $503.7M | -$430.0M | -18.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -66.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 21.3% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$1.9B | 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 Weakening
Operating cash flow fell significantly from the prior quarter, while capital expenditure rose. This combination drove free cash flow deeply negative despite higher revenue than a year ago.
The weakened cash conversion from operations is the primary observable factor behind the negative free cash flow.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a percentage of revenue was lower than the prior quarter, reflecting a weaker conversion of sales into cash. Combined with higher capital expenditure, free cash flow margin turned negative.
Compared to the prior quarter, revenue was lower and operating cash flow decreased substantially, while capital expenditure rose. Free cash flow shifted from positive to negative. Versus the same quarter last year, revenue was higher and operating cash flow improved from negative to positive, but capital expenditure also increased, resulting in a slightly less negative free cash flow.
Monitor the trajectory of operating cash flow given its sharp decline from the prior quarter.