Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was slightly higher than the prior quarter but lower than the same quarter last year. Operating cash flow declined sharply from both comparison periods, and free cash flow turned deeply negative after being near break-even in the prior quarter and strongly positive a year ago.
- Operating cash flow as a proportion of revenue weakened significantly versus both the prior quarter and the year-ago quarter. Capital expenditure remained elevated relative to operating cash flow, resulting in a negative free cash flow margin that was much lower than the near-zero margin of the prior quarter and the positive margin of the year-ago quarter.
- Compared to the prior quarter, revenue was slightly higher but operating cash flow was substantially lower, while capital expenditure was moderately lower. Compared to the same quarter last year, revenue was lower, operating cash flow was much lower, and capital expenditure increased from zero to a material amount, driving a large swing in free cash flow from positive to negative.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$1.5B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$440.1M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$521.1M
Cash generated by operations before capital spending.
CapEx
$961.2M
Capital spending and related asset purchases.
FCF margin
-15.7%
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 |
|---|---|---|---|---|---|
| 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% |
| 2023-12-31 | $2.7B | $1.1B | $1.1B | -$3.7M | -0.1% |
| 2024-03-31 | $2.8B | $521.1M | $961.2M | -$440.1M | -15.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -575.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 34.4% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$25.2B | 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 in the current quarter was a material amount, compared to zero in the year-ago quarter and a similar level in the prior quarter. This spending, combined with lower operating cash flow, drove free cash flow deeply negative.
The elevated capital expenditure was the strongest observable driver of the negative free cash flow in the quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a proportion of revenue weakened significantly versus both the prior quarter and the year-ago quarter. Capital expenditure remained elevated relative to operating cash flow, resulting in a negative free cash flow margin that was much lower than the near-zero margin of the prior quarter and the positive margin of the year-ago quarter.
Compared to the prior quarter, revenue was slightly higher but operating cash flow was substantially lower, while capital expenditure was moderately lower. Compared to the same quarter last year, revenue was lower, operating cash flow was much lower, and capital expenditure increased from zero to a material amount, driving a large swing in free cash flow from positive to negative.
Monitor the trajectory of capital expenditure relative to operating cash flow, as the current quarter's large capex outlay was the primary factor behind the negative free cash flow.