Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow was negative for the quarter, though the deficit narrowed sharply versus the prior quarter and the same quarter last year. Operating cash flow improved while capital expenditure remained stable, resulting in a less negative free cash flow margin.
- Revenue was higher than the preceding quarter, and operating cash flow increased more than proportionally, while capital expenditure was unchanged, leading to a less negative free cash flow. The free cash flow margin improved from the prior quarter and from a year ago.
- Compared with the immediately preceding quarter, revenue and operating cash flow were both higher, capital expenditure was similar, and free cash flow and margin were less negative. Versus the same quarter one year earlier, operating cash flow was higher, capital expenditure was lower, and free cash flow and margin were significantly improved.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$524.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$270.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$808.0M
Cash generated by operations before capital spending.
CapEx
$1.1B
Capital spending and related asset purchases.
FCF margin
-12.8%
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 | $2.8B | $1.7B | $1.1B | $590.0M | 21.4% |
| 2023-06-30 | $1.9B | $769.0M | $1.1B | -$367.0M | -19.6% |
| 2023-09-30 | $1.9B | $587.0M | $1.1B | -$477.0M | -25.6% |
| 2023-12-31 | $2.1B | $808.0M | $1.1B | -$270.0M | -12.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -140.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 51.0% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$17.5B | 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 improvement
Operating cash flow was higher sequentially and year-over-year, while capital expenditure was stable sequentially and lower year-over-year. This combination drove the narrowing of the free cash flow deficit.
Higher operating cash flow relative to stable or lower capital expenditure was the strongest observable driver of the improved free cash flow.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher than the preceding quarter, and operating cash flow increased more than proportionally, while capital expenditure was unchanged, leading to a less negative free cash flow. The free cash flow margin improved from the prior quarter and from a year ago.
Compared with the immediately preceding quarter, revenue and operating cash flow were both higher, capital expenditure was similar, and free cash flow and margin were less negative. Versus the same quarter one year earlier, operating cash flow was higher, capital expenditure was lower, and free cash flow and margin were significantly improved.
Monitor whether operating cash flow can sustain the improvement while capital expenditure remains at the current level.