Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned sharply negative as operating cash flow swung from a large inflow to a large outflow, while capital expenditure was slightly lower than the prior quarter. Revenue was slightly higher than a year ago but lower than the preceding quarter, and the free cash flow margin weakened significantly from both comparison periods.
- Revenue was stable relative to the year-ago quarter, but operating cash flow was more negative, resulting in a free cash flow deficit that was deeper than both the prior quarter and the year-ago period. The free cash flow margin was negative, contrasting with a positive margin in the preceding quarter and a narrower negative margin one year earlier.
- Compared with the immediately preceding quarter, revenue was lower, operating cash flow shifted from positive to negative, and free cash flow and margin both turned from positive to negative. Versus the same quarter one year ago, revenue was slightly higher but operating cash flow was more negative, free cash flow was more negative, and the margin weakened.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$999.6M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$805.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
-$745.0M
Cash generated by operations before capital spending.
CapEx
$60.0M
Capital spending and related asset purchases.
FCF margin
-11.0%
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 | $7.6B | $454.4M | $54.7M | $399.8M | 5.3% |
| 2022-09-30 | $7.4B | $753.9M | $64.3M | $689.6M | 9.3% |
| 2022-12-31 | $8.0B | $814.2M | $99.0M | $715.2M | 8.9% |
| 2023-03-31 | $7.3B | -$745.0M | $60.0M | -$805.0M | -11.0% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -688.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.8% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$1.9B | 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
The most observable driver was the change in operating cash flow, which moved from a large positive amount in the prior quarter to a large negative amount in the current quarter, and became more negative than the year-ago quarter. This drove free cash flow to a negative position.
The swing in operating cash flow outweighed the modest reduction in capital expenditure, turning free cash flow and its margin deeply negative.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was stable relative to the year-ago quarter, but operating cash flow was more negative, resulting in a free cash flow deficit that was deeper than both the prior quarter and the year-ago period. The free cash flow margin was negative, contrasting with a positive margin in the preceding quarter and a narrower negative margin one year earlier.
Compared with the immediately preceding quarter, revenue was lower, operating cash flow shifted from positive to negative, and free cash flow and margin both turned from positive to negative. Versus the same quarter one year ago, revenue was slightly higher but operating cash flow was more negative, free cash flow was more negative, and the margin weakened.
Monitor whether operating cash flow can revert to a positive level in the coming quarters, given the company's reliance on internally generated cash flow as cited in its liquidity discussion.