Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue increased from the prior quarter but decreased from the same quarter last year. Operating cash flow improved year over year, yet free cash flow remained negative due to substantial capital expenditure.
- Operating cash flow covered only a portion of capital expenditure, resulting in a negative free cash flow margin. The margin improved sequentially but declined compared to the prior year.
- Compared to the preceding quarter, revenue and operating cash flow were higher, capital expenditure was higher, and free cash flow was more negative, though the free cash flow margin improved. Versus the same quarter last year, revenue was lower, operating cash flow was higher, capital expenditure was lower, and free cash flow was less negative, but the margin weakened.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$736.2M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$524.4M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$245.3M
Cash generated by operations before capital spending.
CapEx
$769.6M
Capital spending and related asset purchases.
FCF margin
-45.3%
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 | $1.5B | $2.7B | $619.7M | $2.1B | 135.2% |
| 2023-06-30 | $662.7M | $328.8M | $668.1M | -$339.3M | -51.2% |
| 2023-09-30 | $587.6M | $238.2M | $722.5M | -$484.3M | -82.4% |
| 2023-12-31 | $1.2B | $245.3M | $769.6M | -$524.4M | -45.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -168.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 66.4% | 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 funding
Capital expenditure consistently exceeds operating cash flow, requiring external financing. The filing notes that the company uses a combination of internal cash flows and external debt and equity to fund capital needs.
This reliance on external financing makes free cash flow sensitive to changes in capital spending and financing conditions.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow covered only a portion of capital expenditure, resulting in a negative free cash flow margin. The margin improved sequentially but declined compared to the prior year.
Compared to the preceding quarter, revenue and operating cash flow were higher, capital expenditure was higher, and free cash flow was more negative, though the free cash flow margin improved. Versus the same quarter last year, revenue was lower, operating cash flow was higher, capital expenditure was lower, and free cash flow was less negative, but the margin weakened.
Monitor the trend in capital expenditure relative to operating cash flow, as it is the primary factor driving free cash flow.