Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue declined while operating cash flow improved. However, a significant increase in capital expenditure led to a more negative free cash flow and a weaker free cash flow margin compared to both the prior quarter and the same quarter last year. The filing notes that forward-looking statements are subject to risks and uncertainties.
- The company converted a lower revenue into higher operating cash flow, but the cash conversion was heavily impacted by elevated capital spending, resulting in a negative free cash flow and a lower margin.
- Compared to the previous quarter, revenue was lower while operating cash flow was higher; capital expenditure increased, causing free cash flow to become more negative and the margin to weaken. Versus the same quarter one year ago, revenue was lower and operating cash flow was higher, but capital expenditure was substantially higher, leading to a much more negative free cash flow and a weaker margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$2.5B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$867.7M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$801.7M
Cash generated by operations before capital spending.
CapEx
$1.7B
Capital spending and related asset purchases.
FCF margin
-29.6%
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 |
|---|---|---|---|---|---|
| 2023-03-31 | $3.2B | $638.7M | $1.0B | -$368.2M | -11.5% |
| 2023-06-30 | $3.0B | $845.4M | $1.3B | -$477.0M | -15.7% |
| 2023-12-31 | $3.0B | $626.6M | $1.4B | -$818.9M | -27.3% |
| 2024-03-31 | $2.9B | $801.7M | $1.7B | -$867.7M | -29.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -151.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 57.0% | 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 Increase
Capital expenditure was higher than both the prior quarter and the year-ago quarter, representing a significant outflow that more than offset the improvement in operating cash flow.
The elevated capital spending has been the primary driver of the more negative free cash flow and the decline in free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
The company converted a lower revenue into higher operating cash flow, but the cash conversion was heavily impacted by elevated capital spending, resulting in a negative free cash flow and a lower margin.
Compared to the previous quarter, revenue was lower while operating cash flow was higher; capital expenditure increased, causing free cash flow to become more negative and the margin to weaken. Versus the same quarter one year ago, revenue was lower and operating cash flow was higher, but capital expenditure was substantially higher, leading to a much more negative free cash flow and a weaker margin.
Monitor the trajectory of capital expenditure relative to operating cash flow, as the current gap has widened considerably.