Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow was negative in the current quarter, reflecting a cash conversion rate that was lower than the prior quarter but slightly improved from the same quarter last year. Operating cash flow was higher than a year ago, yet capital expenditure increased more than proportionally, resulting in a negative free cash flow margin.
- Revenue was lower than the prior quarter, and operating cash flow decreased, while capital expenditure rose, leading to a shift from positive free cash flow in the prior quarter to negative free cash flow in the current quarter. Compared to the same quarter last year, revenue was stable, operating cash flow was higher, and capital expenditure increased, resulting in a slightly less negative free cash flow margin.
- Compared to the immediately preceding quarter, free cash flow weakened significantly, driven by lower operating cash flow and higher capital expenditure. Versus the same quarter one year earlier, free cash flow improved modestly, as operating cash flow growth outpaced the increase in capital expenditure.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$353.8M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$247.6M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$428.5M
Cash generated by operations before capital spending.
CapEx
$676.1M
Capital spending and related asset purchases.
FCF margin
-21.4%
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 |
|---|---|---|---|---|---|
| 2023-03-31 | $1.2B | $362.9M | $527.7M | -$164.8M | -13.2% |
| 2023-06-30 | $1.3B | $352.3M | $576.5M | -$224.2M | -17.1% |
| 2023-09-30 | $1.6B | $836.5M | $553.7M | $282.8M | 17.3% |
| 2023-12-31 | $1.2B | $428.5M | $676.1M | -$247.6M | -21.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -426.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 58.4% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$11.8B | 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 Increase
Capital expenditure was higher than both the prior quarter and the same quarter last year, while operating cash flow did not keep pace, resulting in negative free cash flow. The filing references projected capital expenditures through 2028 and a transition of the generation fleet, which may continue to influence spending levels.
The elevated capital expenditure was the strongest observable driver of the negative free cash flow in the current quarter.
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, and operating cash flow decreased, while capital expenditure rose, leading to a shift from positive free cash flow in the prior quarter to negative free cash flow in the current quarter. Compared to the same quarter last year, revenue was stable, operating cash flow was higher, and capital expenditure increased, resulting in a slightly less negative free cash flow margin.
Compared to the immediately preceding quarter, free cash flow weakened significantly, driven by lower operating cash flow and higher capital expenditure. Versus the same quarter one year earlier, free cash flow improved modestly, as operating cash flow growth outpaced the increase in capital expenditure.
Monitor the trajectory of capital expenditure relative to operating cash flow, as the gap widened in the current quarter.