Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned negative as operating cash flow declined sharply from the previous quarter, while capital expenditure remained relatively stable. Compared with the same quarter last year, cash generation improved significantly from a deeply negative position.
- Revenue was higher than the prior quarter, but operating cash flow was lower, resulting in a free cash flow that was negative and a weakened margin. The conversion of revenue into free cash flow was insufficient to cover capital expenditure.
- Compared with the immediately preceding quarter, free cash flow weakened from positive to negative, driven by a lower operating cash flow despite slightly higher revenue. Versus the same quarter one year earlier, free cash flow improved from a larger negative figure, and the margin moved from negative to near zero.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$480.2M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$7.4M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$150.9M
Cash generated by operations before capital spending.
CapEx
$158.3M
Capital spending and related asset purchases.
FCF margin
-0.6%
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 |
|---|---|---|---|---|---|
| 2022-06-30 | $1.3B | $275.3M | $158.9M | $116.4M | 8.8% |
| 2022-09-30 | $1.2B | $354.9M | $153.0M | $201.9M | 16.2% |
| 2022-12-31 | $1.2B | $325.4M | $156.1M | $169.3M | 14.1% |
| 2023-03-31 | $1.3B | $150.9M | $158.3M | -$7.4M | -0.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -6.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 12.2% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$5.6B | 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 Decline
Operating cash flow was lower than the previous quarter, while capital expenditure was essentially stable. This shift was the strongest observable factor causing free cash flow to turn negative.
The reduction in operating cash flow relative to capital expenditure erased the free cash flow surplus seen in the prior quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher than the prior quarter, but operating cash flow was lower, resulting in a free cash flow that was negative and a weakened margin. The conversion of revenue into free cash flow was insufficient to cover capital expenditure.
Compared with the immediately preceding quarter, free cash flow weakened from positive to negative, driven by a lower operating cash flow despite slightly higher revenue. Versus the same quarter one year earlier, free cash flow improved from a larger negative figure, and the margin moved from negative to near zero.
Monitor the trend in operating cash flow given its sharp sequential decline, as it is the primary component influencing free cash flow.