Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned deeply negative in the current quarter, driven by a substantial increase in capital expenditure relative to operating cash flow. Revenue declined compared to both the prior quarter and the same quarter last year.
- Operating cash flow improved from the prior quarter but was lower than a year ago, while capital expenditure surged, resulting in a negative free cash flow and a weakened free cash flow margin.
- Compared to the prior quarter, revenue was higher but free cash flow shifted from positive to negative due to a large increase in capital expenditure. Versus the same quarter last year, revenue, operating cash flow, and free cash flow were all lower, while capital expenditure was significantly higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$4.3B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$1.9B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.4B
Cash generated by operations before capital spending.
CapEx
$3.3B
Capital spending and related asset purchases.
FCF margin
-53.9%
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 |
|---|---|---|---|---|---|
| 2022-12-31 | $3.3B | $776.0M | $5.0B | -$4.2B | -127.8% |
| 2023-03-31 | $3.0B | $959.5M | $0 | $959.5M | 32.2% |
| 2023-06-30 | $2.8B | $866.4M | $30.4M | $836.0M | 29.4% |
| 2023-09-30 | $3.6B | $1.4B | $3.3B | -$1.9B | -53.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -289.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 93.0% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$24.7B | 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 rose sharply compared to both the prior quarter and the same quarter last year, far outpacing the growth in operating cash flow. This was the strongest observable driver of the negative free cash flow.
The elevated capital expenditure directly caused free cash flow to turn deeply negative despite higher operating cash flow than the prior quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow improved from the prior quarter but was lower than a year ago, while capital expenditure surged, resulting in a negative free cash flow and a weakened free cash flow margin.
Compared to the prior quarter, revenue was higher but free cash flow shifted from positive to negative due to a large increase in capital expenditure. Versus the same quarter last year, revenue, operating cash flow, and free cash flow were all lower, while capital expenditure was significantly higher.
Monitor the trajectory of capital expenditure, as its substantial increase was the primary factor behind the negative free cash flow.