Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
In the current quarter, revenue was negative while operating cash flow was positive and higher than both the prior quarter and the same quarter a year earlier. Free cash flow also increased, but the free cash flow margin turned negative due to the negative revenue.
- Revenue was negative, yet operating cash flow was positive, resulting in a negative free cash flow margin. Capital expenditure remained minimal.
- Compared to the prior quarter, revenue was lower, operating cash flow was higher, and free cash flow was higher, but the free cash flow margin weakened from positive to negative. The same pattern held versus the year-ago quarter.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.1B
Trailing twelve-month free cash flow.
Quarter free cash flow
$343.7M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$344.0M
Cash generated by operations before capital spending.
CapEx
$244000
Capital spending and related asset purchases.
FCF margin
-70.4%
The share of revenue converted into free cash flow.
FCF reconciliation
Free cash flow is not a GAAP line item; it should be bridged from the cash flow statement.
| Operating cash flow | $344.0M | Cash generated by operations before capital spending. |
| Capital expenditures | $244000 | Capital spending used to bridge CFO to FCF. |
| Free cash flow | $343.7M | Operating cash flow less capital spending. |
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 |
|---|---|---|---|---|---|
| 2022-06-30 | $776.2M | $106.8M | $115000 | $106.7M | 13.7% |
| 2022-09-30 | $713.1M | $174.5M | $221000 | $174.3M | 24.4% |
| 2022-12-31 | $702.3M | $163.2M | $41000 | $163.2M | 23.2% |
| 2023-03-31 | $715.4M | $288.7M | $70000 | $288.6M | 40.3% |
| 2023-06-30 | $750.2M | $229.8M | $3.7M | $226.0M | 30.1% |
| 2023-09-30 | $864.3M | $199.1M | $183000 | $198.9M | 23.0% |
| 2023-12-31 | -$488.1M | $344.0M | $244000 | $343.7M | -70.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 199.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | -0.0% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$2.6B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Revenue reversal
Revenue turned negative in the current quarter, while operating cash flow remained strongly positive.
The negative revenue is a key metric to watch as it directly affects the free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was negative, yet operating cash flow was positive, resulting in a negative free cash flow margin. Capital expenditure remained minimal.
Compared to the prior quarter, revenue was lower, operating cash flow was higher, and free cash flow was higher, but the free cash flow margin weakened from positive to negative. The same pattern held versus the year-ago quarter.
Monitor the revenue figure in upcoming periods given its negative value in the current quarter.
Risks and tripwires
Observable signals that would weaken the free cash flow thesis.
| Risk | Tripwire | Why it matters |
|---|---|---|
| FCF margin compression | FCF margin falls for two consecutive quarters. | Cash conversion may be weakening before earnings show it. |
| Capital intensity rises | CapEx/revenue moves materially above the recent run rate. | More operating cash flow would be consumed before becoming FCF. |
| Working capital drag | Inventory or receivables grow faster than revenue. | Reported growth may not translate into cash. |