Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow remained negative for the quarter, driven by capital expenditure exceeding operating cash flow. Revenue declined sequentially but was relatively stable year over year.
- Operating cash flow improved from the prior year but fell sharply from the previous quarter, while capital expenditure stayed elevated. This resulted in a negative free cash flow margin that narrowed from the year-ago period.
- Compared to the prior quarter, revenue, operating cash flow, and free cash flow all weakened, with free cash flow shifting from positive to negative. Year over year, operating cash flow strengthened and free cash flow deficit decreased.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$1.5B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$367.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$769.0M
Cash generated by operations before capital spending.
CapEx
$1.1B
Capital spending and related asset purchases.
FCF margin
-19.6%
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 |
|---|---|---|---|---|---|
| 2022-09-30 | $1.9B | $347.0M | $1.2B | -$852.0M | -44.7% |
| 2022-12-31 | $2.7B | $485.0M | $1.3B | -$855.0M | -32.0% |
| 2023-03-31 | $2.8B | $1.7B | $1.1B | $590.0M | 21.4% |
| 2023-06-30 | $1.9B | $769.0M | $1.1B | -$367.0M | -19.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -311.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 60.7% | 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 vs. capital expenditure
Operating cash flow increased year over year but was insufficient to cover capital expenditure, leading to negative free cash flow. The gap narrowed compared to the prior year but widened sequentially.
Sustained capital expenditure above operating cash flow will continue to pressure 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 from the prior year but fell sharply from the previous quarter, while capital expenditure stayed elevated. This resulted in a negative free cash flow margin that narrowed from the year-ago period.
Compared to the prior quarter, revenue, operating cash flow, and free cash flow all weakened, with free cash flow shifting from positive to negative. Year over year, operating cash flow strengthened and free cash flow deficit decreased.
Monitor the trend in capital expenditure given its consistent high level relative to operating cash flow.