Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue remained stable compared to the prior quarter and improved from a year ago, but operating cash flow turned negative, significantly widening the free cash flow deficit. The free cash flow margin weakened substantially from both the preceding quarter and the same quarter last year.
- Operating cash flow was negative while capital expenditure remained elevated, resulting in a large negative free cash flow and a deeply negative margin. Cash conversion from revenue was unfavorable compared to both prior periods.
- Operating cash flow and free cash flow both worsened compared to the prior quarter and the same quarter a year earlier. Revenue was stable sequentially and higher year-over-year, but the cash flow deterioration more than offset the revenue improvement.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$742.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$761.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
-$112.0M
Cash generated by operations before capital spending.
CapEx
$649.0M
Capital spending and related asset purchases.
FCF margin
-23.6%
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 | $2.8B | $928.0M | $647.0M | $281.0M | 10.0% |
| 2022-09-30 | $3.5B | $554.0M | $666.0M | -$112.0M | -3.2% |
| 2022-12-31 | $3.2B | $846.0M | $996.0M | -$150.0M | -4.7% |
| 2023-03-31 | $3.2B | -$112.0M | $649.0M | -$761.0M | -23.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -245.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 20.1% | 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.
Sharp Decline in Operating Cash Flow
Operating cash flow shifted from positive in both prior periods to negative this quarter, despite stable revenue. This change had a direct and outsized impact on free cash flow, outweighing the reduction in capital expenditure.
The negative operating cash flow is the strongest observable factor causing the free cash flow deficit to widen significantly this quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow was negative while capital expenditure remained elevated, resulting in a large negative free cash flow and a deeply negative margin. Cash conversion from revenue was unfavorable compared to both prior periods.
Operating cash flow and free cash flow both worsened compared to the prior quarter and the same quarter a year earlier. Revenue was stable sequentially and higher year-over-year, but the cash flow deterioration more than offset the revenue improvement.
Monitor whether operating cash flow can return to positive territory in the coming quarters, as the current negative level is the primary driver of free cash flow weakness.