Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned negative in the current quarter, driven by a sharp decline in revenue and operating cash flow compared to the prior quarter. Capital expenditure remained relatively stable, while the free cash flow margin weakened significantly.
- Revenue decreased substantially from the prior quarter, and operating cash flow fell even more sharply, resulting in a negative free cash flow after capital expenditure. The free cash flow margin turned negative, indicating that cash conversion weakened considerably.
- Compared to the prior quarter, revenue, operating cash flow, and free cash flow all declined, with free cash flow shifting from positive to negative. Versus the same quarter last year, revenue was lower, but operating cash flow improved and free cash flow was less negative.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.6B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$49.9M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$437.1M
Cash generated by operations before capital spending.
CapEx
$487.0M
Capital spending and related asset purchases.
FCF margin
-5.9%
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 | $3.7B | $1.2B | $362.5M | $787.6M | 21.3% |
| 2022-12-31 | -$2.0B | $1.1B | $353.0M | $710.8M | -34.7% |
| 2023-03-31 | $1.8B | $1.7B | $494.8M | $1.2B | 63.8% |
| 2023-06-30 | $848.3M | $437.1M | $487.0M | -$49.9M | -5.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 74.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 57.4% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$3.5B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Revenue Decline
Revenue dropped significantly from the prior quarter and also fell compared to the same quarter last year, which was the primary observable factor behind the weakened operating cash flow and negative free cash flow.
The decline in revenue directly reduced operating cash flow, causing free cash flow to turn negative despite relatively stable capital expenditure.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue decreased substantially from the prior quarter, and operating cash flow fell even more sharply, resulting in a negative free cash flow after capital expenditure. The free cash flow margin turned negative, indicating that cash conversion weakened considerably.
Compared to the prior quarter, revenue, operating cash flow, and free cash flow all declined, with free cash flow shifting from positive to negative. Versus the same quarter last year, revenue was lower, but operating cash flow improved and free cash flow was less negative.
Monitor the trajectory of operating cash flow relative to capital expenditure, as the current quarter's negative free cash flow resulted from operating cash flow falling below capital spending.