Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Operating cash flow turned negative this quarter, leading to a widened free cash flow deficit versus the prior quarter. Compared to the same quarter one year earlier, the free cash flow margin improved significantly as both operating cash outflow and capital spending contracted.
- Revenue declined slightly from both the prior quarter and the year-ago quarter, while operating cash flow moved from positive to negative sequentially and improved versus the year-ago quarter. The negative free cash flow margin resulted from operating cash outflows that more than offset capital expenditure, which was lower than in both comparative periods.
- Compared to the immediately preceding quarter, free cash flow deteriorated from a positive to a negative figure, driven by a shift from positive to negative operating cash flow. Relative to the same quarter one year earlier, free cash flow improved, as the operating cash outflow and capital spending were both lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$118.4M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$30.5M
Free cash flow in the selected fiscal quarter.
Operating cash flow
-$28.5M
Cash generated by operations before capital spending.
CapEx
$2.0M
Capital spending and related asset purchases.
FCF margin
-41.5%
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 |
|---|---|---|---|---|---|
| 2023-04-01 | $92.2M | -$42.2M | $5.3M | -$47.5M | -51.5% |
| 2023-07-01 | $102.1M | -$46.2M | $1.8M | -$48.0M | -47.0% |
| 2023-09-30 | $75.3M | $9.1M | $1.4M | $7.6M | 10.1% |
| 2023-12-31 | $73.7M | -$28.5M | $2.0M | -$30.5M | -41.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 19.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.7% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$947.0M | 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 swing
Operating cash flow moved from positive in the prior quarter to negative this quarter, reversing the free cash flow sign. The year-ago quarter also had negative operating cash flow but at a larger magnitude, so the comparison year-over-year shows improvement.
The swing in operating cash flow was the strongest observable driver of the change in free cash flow this quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue declined slightly from both the prior quarter and the year-ago quarter, while operating cash flow moved from positive to negative sequentially and improved versus the year-ago quarter. The negative free cash flow margin resulted from operating cash outflows that more than offset capital expenditure, which was lower than in both comparative periods.
Compared to the immediately preceding quarter, free cash flow deteriorated from a positive to a negative figure, driven by a shift from positive to negative operating cash flow. Relative to the same quarter one year earlier, free cash flow improved, as the operating cash outflow and capital spending were both lower.
Monitor whether operating cash flow returns to positive levels in subsequent quarters, as the current quarter's negative cash from operations was the primary driver of the free cash flow deficit.