Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned negative in the quarter as capital expenditure exceeded operating cash flow, leading to a negative margin. Revenue and operating cash flow were both higher than a year earlier, but increased capital spending erased the gain.
- Operating cash flow as a percentage of revenue weakened from the prior quarter and the year-ago period, while capital expenditure as a share of revenue rose. The resulting free cash flow margin turned negative, compared with positive margins in both comparison periods.
- Compared with the immediately preceding quarter, revenue was slightly lower but operating cash flow was higher; however, capital expenditure increased more sharply, flipping free cash flow from positive to negative. Versus the same quarter one year earlier, revenue and operating cash flow were both higher, but capital expenditure grew by a larger amount, turning a small positive free cash flow into a negative figure.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$455.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$42.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.3B
Cash generated by operations before capital spending.
CapEx
$1.4B
Capital spending and related asset purchases.
FCF margin
-0.7%
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 |
|---|---|---|---|---|---|
| 2023-03-31 | $5.1B | $1.1B | $1.1B | -$71.0M | -1.4% |
| 2023-06-30 | $5.9B | $1.7B | $1.2B | $510.0M | 8.6% |
| 2023-09-30 | $5.9B | $1.2B | $1.2B | $58.0M | 1.0% |
| 2023-12-31 | $5.8B | $1.3B | $1.4B | -$42.0M | -0.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -4.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 23.5% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$4.7B | 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 Outpacing Operating Cash Flow
The strongest observable driver was the increase in capital expenditure relative to both the prior quarter and the year-ago period, which more than offset higher operating cash flow. This caused free cash flow to decline from positive to negative.
Higher capital expenditure absorbed all operating cash flow and more, resulting in a negative free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a percentage of revenue weakened from the prior quarter and the year-ago period, while capital expenditure as a share of revenue rose. The resulting free cash flow margin turned negative, compared with positive margins in both comparison periods.
Compared with the immediately preceding quarter, revenue was slightly lower but operating cash flow was higher; however, capital expenditure increased more sharply, flipping free cash flow from positive to negative. Versus the same quarter one year earlier, revenue and operating cash flow were both higher, but capital expenditure grew by a larger amount, turning a small positive free cash flow into a negative figure.
Monitor whether capital expenditure remains above operating cash flow, as this directly determines the sustainability of free cash flow generation.