Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned negative in the current quarter, driven by an operating cash outflow that more than offset capital spending. Both revenue and cash conversion weakened compared with the prior quarter, while the year-ago quarter also showed a free cash deficit.
- Revenue declined, operating cash flow was negative, and capital expenditure was lower than both comparison quarters, resulting in a negative free cash flow margin. This marks a reversal from the prior quarter's positive conversion and a slight narrowing of the deficit versus the year-ago period.
- Compared with the immediately preceding quarter, revenue, operating cash flow, and free cash flow all decreased, and the free cash flow margin shifted from positive to negative. Versus the same quarter one year earlier, revenue was lower but operating cash flow and free cash flow improved (less negative), while the margin also improved.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$888.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$259.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
-$135.0M
Cash generated by operations before capital spending.
CapEx
$124.0M
Capital spending and related asset purchases.
FCF margin
-7.5%
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 |
|---|---|---|---|---|---|
| 2022-12-31 | $3.6B | $405.0M | $98.0M | $307.0M | 8.4% |
| 2023-03-31 | $3.7B | $184.0M | $132.0M | $52.0M | 1.4% |
| 2023-06-30 | $3.7B | $932.0M | $144.0M | $788.0M | 21.5% |
| 2023-09-30 | $3.4B | -$135.0M | $124.0M | -$259.0M | -7.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -170.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.6% | 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.
Operating Cash Flow Shift
Operating cash flow turned from a large positive in the prior quarter to a negative amount in the current quarter, which is the strongest observable driver of the free cash flow decline. Revenue decreased over the same period.
This operating cash outflow caused free cash flow to swing to a deficit despite lower capital expenditure.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue declined, operating cash flow was negative, and capital expenditure was lower than both comparison quarters, resulting in a negative free cash flow margin. This marks a reversal from the prior quarter's positive conversion and a slight narrowing of the deficit versus the year-ago period.
Compared with the immediately preceding quarter, revenue, operating cash flow, and free cash flow all decreased, and the free cash flow margin shifted from positive to negative. Versus the same quarter one year earlier, revenue was lower but operating cash flow and free cash flow improved (less negative), while the margin also improved.
Monitor whether the operating cash flow trend can return to positive territory in the near term, as it is the primary determinant of free cash flow direction.