Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Operating cash flow was significantly lower than capital expenditure, producing a large negative free cash flow margin. Revenue rose versus the prior quarter and the year-ago quarter, but cash generation weakened substantially.
- Revenue was high, yet operating cash flow was modest, while capital expenditure was substantial. This combination resulted in a deeply negative free cash flow and a weak cash conversion rate, as shown by the free cash flow margin.
- Compared to the immediately preceding quarter, revenue increased but operating cash flow dropped sharply, leading to a deeper negative free cash flow and a weakened margin. Versus the same quarter one year earlier, revenue was higher, operating cash flow was lower, and the free cash flow deficit expanded with a weaker margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$1.6B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$908.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$69.2M
Cash generated by operations before capital spending.
CapEx
$977.1M
Capital spending and related asset purchases.
FCF margin
-23.9%
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 |
|---|---|---|---|---|---|
| 2022-06-30 | $2.6B | $469.9M | $784.5M | -$314.6M | -12.2% |
| 2022-09-30 | $3.2B | $847.1M | $803.7M | $43.4M | 1.4% |
| 2022-12-31 | $3.0B | $712.4M | $1.1B | -$376.7M | -12.4% |
| 2023-03-31 | $3.8B | $69.2M | $977.1M | -$908.0M | -23.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -184.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 25.7% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$22.1B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Elevated Capital Expenditure
Capital expenditure was materially higher in the current quarter compared to both the prior quarter and the year-ago quarter. This spending, combined with lower operating cash flow, was the strongest observable driver of the negative free cash flow.
The high level of capital expenditure absorbed most of the operating cash flow and contributed to a free cash flow margin that was worse than in either comparison period.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was high, yet operating cash flow was modest, while capital expenditure was substantial. This combination resulted in a deeply negative free cash flow and a weak cash conversion rate, as shown by the free cash flow margin.
Compared to the immediately preceding quarter, revenue increased but operating cash flow dropped sharply, leading to a deeper negative free cash flow and a weakened margin. Versus the same quarter one year earlier, revenue was higher, operating cash flow was lower, and the free cash flow deficit expanded with a weaker margin.
Monitor the trend of operating cash flow relative to capital expenditure, as the current quarter shows a wide gap that drove a large free cash flow deficit.