Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue declined sharply compared to both the prior quarter and the same quarter last year, while free cash flow fell substantially due to higher capital expenditure relative to operating cash flow. The free cash flow margin weakened markedly, turning from a high margin to a much lower level.
- Operating cash flow improved compared to the prior quarter but was slightly higher than the year-ago quarter; however, capital expenditure rose sharply relative to both periods, causing free cash flow to fall. The free cash flow margin dropped significantly, indicating a weaker conversion of revenue into free cash flow.
- Compared to the prior quarter, revenue declined while operating cash flow improved, yet free cash flow and margin weakened due to higher capital expenditure. Versus the same quarter last year, all metrics except operating cash flow were lower, with free cash flow and margin showing the largest relative declines.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.2B
Trailing twelve-month free cash flow.
Quarter free cash flow
$44.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$868.0M
Cash generated by operations before capital spending.
CapEx
$824.0M
Capital spending and related asset purchases.
FCF margin
102.3%
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 | $149.0M | $606.0M | $341.0M | $265.0M | 177.9% |
| 2023-06-30 | $139.0M | $1.1B | $379.0M | $740.0M | 532.4% |
| 2023-09-30 | $90.0M | $533.0M | $347.0M | $186.0M | 206.7% |
| 2023-12-31 | $43.0M | $868.0M | $824.0M | $44.0M | 102.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 12.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1916.3% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$22.8B | 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 Surge
Capital expenditure rose substantially compared to both the prior quarter and the same quarter last year, while revenue declined. This combination compressed free cash flow despite operating cash flow being stable or improved.
Higher capital expenditure was the strongest observable driver of the weakened free cash flow margin and lower absolute free cash flow.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow improved compared to the prior quarter but was slightly higher than the year-ago quarter; however, capital expenditure rose sharply relative to both periods, causing free cash flow to fall. The free cash flow margin dropped significantly, indicating a weaker conversion of revenue into free cash flow.
Compared to the prior quarter, revenue declined while operating cash flow improved, yet free cash flow and margin weakened due to higher capital expenditure. Versus the same quarter last year, all metrics except operating cash flow were lower, with free cash flow and margin showing the largest relative declines.
Monitor the level of capital expenditure relative to operating cash flow, as its increase was the primary factor behind the weakened free cash flow generation.