Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow remained negative in the current quarter, though the deficit narrowed substantially from the prior quarter. Revenue was lower than both the immediately preceding quarter and the same quarter one year earlier.
- Operating cash flow was negative, but the negative amount was much smaller than in the prior quarter. Capital expenditure also decreased, resulting in a free cash flow margin that improved from the prior quarter but remained negative.
- Compared with the prior quarter, revenue was lower while operating cash flow and free cash flow were less negative, showing improvement. Versus the same quarter last year, revenue was lower and both operating cash flow and free cash flow turned from positive to negative.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.3B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$88.7M
Free cash flow in the selected fiscal quarter.
Operating cash flow
-$73.3M
Cash generated by operations before capital spending.
CapEx
$15.4M
Capital spending and related asset purchases.
FCF margin
-4.6%
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 |
|---|---|---|---|---|---|
| 2022-06-30 | $2.0B | $819.8M | $13.1M | $806.7M | 39.7% |
| 2022-09-30 | $1.9B | $866.4M | $34.7M | $831.7M | 42.9% |
| 2022-12-31 | $2.0B | -$256.3M | $27.4M | -$283.7M | -14.4% |
| 2023-03-31 | $1.9B | -$73.3M | $15.4M | -$88.7M | -4.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -45.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.8% | 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.
Operating cash flow improvement
The current quarter's operating cash flow, though still negative, improved significantly from the prior quarter. The filing notes that operating cash flow was affected by lower net income and higher net purchases of investments by consolidated investment products, among other factors.
The narrowing of the operating cash flow deficit was the primary reason free cash flow improved from the prior quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow was negative, but the negative amount was much smaller than in the prior quarter. Capital expenditure also decreased, resulting in a free cash flow margin that improved from the prior quarter but remained negative.
Compared with the prior quarter, revenue was lower while operating cash flow and free cash flow were less negative, showing improvement. Versus the same quarter last year, revenue was lower and both operating cash flow and free cash flow turned from positive to negative.
Monitor whether operating cash flow can return to a positive level, given the year-over-year swing from positive to negative.