Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue and operating cash flow both increased compared to the prior quarter and the year-ago quarter. However, free cash flow turned significantly negative as capital expenditure rose sharply, driven by campus construction commitments disclosed in the filing.
- Operating cash flow improved versus both comparison periods, yet the conversion into free cash flow weakened dramatically because capital expenditure consumed a much larger share of operating cash flow, resulting in a negative free cash flow margin.
- Compared to the immediately preceding quarter, revenue was higher while operating cash flow was slightly lower, but capital expenditure increased substantially, turning free cash flow from positive to negative. Versus the year-ago quarter, both revenue and operating cash flow were higher, but capital expenditure rose by a much larger magnitude, driving free cash flow from positive to negative.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$27.4M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$237.1M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$139.6M
Cash generated by operations before capital spending.
CapEx
$376.7M
Capital spending and related asset purchases.
FCF margin
-36.1%
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 |
|---|---|---|---|---|---|
| 2023-06-30 | $605.9M | $175.2M | $29.9M | $145.3M | 24.0% |
| 2023-09-30 | $624.7M | $42.6M | $16.2M | $26.4M | 4.2% |
| 2023-12-31 | $640.1M | $149.0M | $56.2M | $92.8M | 14.5% |
| 2024-03-31 | $656.4M | $139.6M | $376.7M | -$237.1M | -36.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -3538.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 57.4% | 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.
Capital Expenditure Surge
Capital expenditure increased sharply compared to both the prior quarter and the year-ago quarter, far outpacing the growth in operating cash flow. This was the primary factor behind the swing to a negative free cash flow.
The elevated capital expenditure drove free cash flow negative despite higher operating cash flow, reversing the positive free cash flow position seen in both comparison periods.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow improved versus both comparison periods, yet the conversion into free cash flow weakened dramatically because capital expenditure consumed a much larger share of operating cash flow, resulting in a negative free cash flow margin.
Compared to the immediately preceding quarter, revenue was higher while operating cash flow was slightly lower, but capital expenditure increased substantially, turning free cash flow from positive to negative. Versus the year-ago quarter, both revenue and operating cash flow were higher, but capital expenditure rose by a much larger magnitude, driving free cash flow from positive to negative.
Monitor whether capital expenditure remains elevated in future quarters as the campus expansion progresses, given the substantial cash requirement noted in the filing.