Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Cash conversion weakened sharply from the prior quarter, with operating cash flow declining to a level that, after capital expenditure, resulted in negative free cash flow. Compared to the same quarter one year earlier, free cash flow improved but remained negative.
- Revenue was slightly lower than the prior quarter, while operating cash flow fell much more steeply, causing free cash flow to turn negative and the free cash flow margin to weaken from positive to negative. Capital expenditure was lower than both the prior quarter and the year-ago quarter.
- Compared to the immediately preceding quarter, free cash flow and operating cash flow were lower, while the free cash flow margin weakened from positive to negative. Versus the same quarter one year earlier, free cash flow and the free cash flow margin were higher (less negative) despite revenue being slightly lower.
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
-$52.7M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$12.5M
Cash generated by operations before capital spending.
CapEx
$65.2M
Capital spending and related asset purchases.
FCF margin
-2.2%
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 |
|---|---|---|---|---|---|
| 2023-03-31 | $2.5B | $455.3M | $66.6M | $388.7M | 15.8% |
| 2023-06-30 | $2.5B | $487.0M | $71.0M | $416.0M | 16.9% |
| 2023-09-30 | $2.5B | $592.4M | $74.2M | $518.2M | 20.5% |
| 2023-12-31 | $2.4B | $12.5M | $65.2M | -$52.7M | -2.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -21.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.7% | 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 Weakening
Operating cash flow declined sharply from the prior quarter, far outpacing the revenue decrease, and was the primary factor behind the negative free cash flow. The year-ago quarter also had negative operating cash flow, but the current quarter's level was much lower than the prior quarter's positive level.
The weakened operating cash flow turned free cash flow negative, reversing the positive free cash flow margin seen in the prior quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was slightly lower than the prior quarter, while operating cash flow fell much more steeply, causing free cash flow to turn negative and the free cash flow margin to weaken from positive to negative. Capital expenditure was lower than both the prior quarter and the year-ago quarter.
Compared to the immediately preceding quarter, free cash flow and operating cash flow were lower, while the free cash flow margin weakened from positive to negative. Versus the same quarter one year earlier, free cash flow and the free cash flow margin were higher (less negative) despite revenue being slightly lower.
Monitor the trajectory of operating cash flow, which was significantly lower than the prior quarter and included equity-based compensation expenses related to the company's recent acquisition.