Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
This quarter's free cash flow was negative, as capital expenditure exceeded operating cash flow. Revenue was lower than both the prior quarter and the same quarter a year earlier, while operating cash flow improved compared to the year-ago period.
- Operating cash flow represented a portion of revenue, but capital expenditure more than consumed that cash, resulting in a negative free cash flow and a negative free cash flow margin.
- Compared to the prior quarter, revenue and operating cash flow were substantially lower, while capital expenditure was slightly higher, shifting free cash flow from positive to negative. Compared to the same quarter a year earlier, revenue was lower, operating cash flow was higher, but capital expenditure also increased, resulting in a more negative free cash flow margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$467.9M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$339.3M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$328.8M
Cash generated by operations before capital spending.
CapEx
$668.1M
Capital spending and related asset purchases.
FCF margin
-51.2%
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 | $722.6M | $48.3M | $718.4M | -$670.1M | -92.7% |
| 2022-12-31 | $1.5B | $188.9M | $795.7M | -$606.8M | -40.9% |
| 2023-03-31 | $1.5B | $2.7B | $619.7M | $2.1B | 135.2% |
| 2023-06-30 | $662.7M | $328.8M | $668.1M | -$339.3M | -51.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -246.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 100.8% | 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 Exceeds Operating Cash Flow
Capital expenditure this quarter was significantly higher than operating cash flow, causing free cash flow to be negative. This imbalance was the primary observable factor behind the negative cash conversion.
The company's reliance on external financing for capital projects may continue if operating cash flow does not increase relative to capital expenditure.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow represented a portion of revenue, but capital expenditure more than consumed that cash, resulting in a negative free cash flow and a negative free cash flow margin.
Compared to the prior quarter, revenue and operating cash flow were substantially lower, while capital expenditure was slightly higher, shifting free cash flow from positive to negative. Compared to the same quarter a year earlier, revenue was lower, operating cash flow was higher, but capital expenditure also increased, resulting in a more negative free cash flow margin.
Monitor the trend of capital expenditure relative to operating cash flow, as the gap widened this quarter.