Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Operating cash flow improved markedly from the prior quarter, while capital expenditure rose. Free cash flow remained negative, with a narrower deficit than the prior quarter but a wider deficit compared to the same quarter last year.
- Revenue was lower than the prior quarter but similar to the year-ago quarter. Operating cash flow increased substantially from the prior quarter and also rose from the year-ago period, yet capital expenditure grew as well, resulting in free cash flow that was less negative than the prior quarter but more negative than a year earlier. The free cash flow margin improved sequentially but weakened year-over-year.
- Compared to the prior quarter, free cash flow improved due to a much stronger operating cash flow, despite higher capital expenditure. Versus the same quarter a year ago, free cash flow weakened as the increase in capital expenditure outpaced the improvement in operating cash flow.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$1.7B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$484.2M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$578.1M
Cash generated by operations before capital spending.
CapEx
$1.1B
Capital spending and related asset purchases.
FCF margin
-18.4%
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 | $3.2B | $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% |
| 2023-06-30 | $2.6B | $578.1M | $1.1B | -$484.2M | -18.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -2799.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 40.4% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$23.8B | 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 recovery
Operating cash flow rebounded sharply from the prior quarter, lifting free cash flow despite higher capital spending. However, the year-over-year comparison shows a weaker free cash flow margin, indicating that capital expenditure growth remains a headwind.
The stronger operating cash flow narrowed the free cash flow deficit, but sustained capital expenditure growth continues to pressure overall cash generation.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was lower than the prior quarter but similar to the year-ago quarter. Operating cash flow increased substantially from the prior quarter and also rose from the year-ago period, yet capital expenditure grew as well, resulting in free cash flow that was less negative than the prior quarter but more negative than a year earlier. The free cash flow margin improved sequentially but weakened year-over-year.
Compared to the prior quarter, free cash flow improved due to a much stronger operating cash flow, despite higher capital expenditure. Versus the same quarter a year ago, free cash flow weakened as the increase in capital expenditure outpaced the improvement in operating cash flow.
Capital expenditure level, which increased both sequentially and year-over-year, is a key item to monitor for its impact on free cash flow.