Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was higher than the prior quarter but operating cash flow weakened substantially, resulting in negative free cash flow. Compared to the same quarter last year, both operating cash flow and free cash flow were significantly lower.
- Cash conversion deteriorated as operating cash flow fell sharply relative to revenue, while capital expenditure decreased only modestly. The free cash flow margin turned negative, contrasting with positive margins in both comparison periods.
- Compared to the immediately preceding quarter, operating cash flow and free cash flow were much lower, despite a slight increase in revenue. Versus the same quarter one year earlier, all cash flow metrics were weaker, with free cash flow moving from positive to negative.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$702.2M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$14.3M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$33.6M
Cash generated by operations before capital spending.
CapEx
$47.9M
Capital spending and related asset purchases.
FCF margin
-1.1%
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 | $1.3B | $309.9M | $59.9M | $250.0M | 19.0% |
| 2022-12-31 | $429.9M | $282.8M | $68.9M | $213.9M | 49.8% |
| 2023-03-31 | $1.2B | $314.1M | $61.5M | $252.6M | 20.7% |
| 2023-06-30 | $1.3B | $33.6M | $47.9M | -$14.3M | -1.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -4.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.7% | Lower capital intensity usually supports FCF margin. |
| Net cash | n/a | 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 Decline
Operating cash flow dropped sharply from the prior quarter and the year-ago quarter, while revenue increased. This decline was the primary factor behind the negative free cash flow, as capital expenditure did not decrease enough to offset it.
The weakened operating cash flow reversed free cash flow to negative, reducing the company's internally generated liquidity.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Cash conversion deteriorated as operating cash flow fell sharply relative to revenue, while capital expenditure decreased only modestly. The free cash flow margin turned negative, contrasting with positive margins in both comparison periods.
Compared to the immediately preceding quarter, operating cash flow and free cash flow were much lower, despite a slight increase in revenue. Versus the same quarter one year earlier, all cash flow metrics were weaker, with free cash flow moving from positive to negative.
Monitor the trajectory of operating cash flow, as it is the primary internal source of liquidity according to the company's liquidity discussion.