Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned negative as capital expenditure matched operating cash flow, reversing a marginally positive prior quarter and a strongly positive year-ago result. Revenue declined sequentially and year-over-year, while operating cash flow held steady versus the prior quarter but fell from the prior year.
- Operating cash flow was fully consumed by capital expenditure, resulting in a negative free cash flow margin. Revenue conversion into operating cash weakened compared to the year-ago quarter, as operating cash flow declined proportionally more than revenue.
- Compared to the prior quarter, free cash flow shifted from slightly positive to negative, driven by higher capital expenditure while operating cash flow was stable. Versus the same quarter one year earlier, free cash flow weakened substantially, with lower revenue and operating cash flow combined with higher capital expenditure.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$631.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$71.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.1B
Cash generated by operations before capital spending.
CapEx
$1.1B
Capital spending and related asset purchases.
FCF margin
-1.4%
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 |
|---|---|---|---|---|---|
| 2022-06-30 | $6.2B | $1.6B | $863.0M | $758.0M | 12.3% |
| 2022-09-30 | $5.3B | $758.0M | $836.0M | -$78.0M | -1.5% |
| 2022-12-31 | $5.4B | $1.1B | $1.0B | $22.0M | 0.4% |
| 2023-03-31 | $5.1B | $1.1B | $1.1B | -$71.0M | -1.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -6.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 21.9% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$2.8B | 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 Surge
Capital expenditure rose from the prior quarter and increased significantly from the year-ago quarter, matching operating cash flow and flipping free cash flow negative. This is the strongest observable driver of the quarter's free cash flow change.
The increase in capital expenditure fully offset operating cash flow, causing free cash flow to turn negative despite stable sequential operating cash flow.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow was fully consumed by capital expenditure, resulting in a negative free cash flow margin. Revenue conversion into operating cash weakened compared to the year-ago quarter, as operating cash flow declined proportionally more than revenue.
Compared to the prior quarter, free cash flow shifted from slightly positive to negative, driven by higher capital expenditure while operating cash flow was stable. Versus the same quarter one year earlier, free cash flow weakened substantially, with lower revenue and operating cash flow combined with higher capital expenditure.
Monitor whether capital expenditure remains at a level that fully absorbs operating cash flow, as this directly determines free cash flow direction.