Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned negative this quarter, weakening from the prior quarter and also declining compared to the same quarter last year. The drop was primarily driven by a steep fall in operating cash flow, while capital expenditure remained elevated.
- Revenue was stable, yet operating cash flow was very low relative to revenue, resulting in a negative free cash flow and a significantly lower free cash flow margin. Capital expenditure remained a material cash outflow.
- Compared to the prior quarter, free cash flow swung from positive to negative, operating cash flow dropped substantially, and the margin weakened. Versus the same quarter last year, free cash flow deteriorated further, operating cash flow was lower, and capital expenditure was higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$223.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$161.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$6.0M
Cash generated by operations before capital spending.
CapEx
$167.0M
Capital spending and related asset purchases.
FCF margin
-2.3%
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 | $8.2B | $103.0M | $189.0M | -$86.0M | -1.1% |
| 2022-12-31 | $7.8B | $359.0M | $159.0M | $200.0M | 2.6% |
| 2023-03-31 | $7.0B | $450.0M | $180.0M | $270.0M | 3.9% |
| 2023-06-30 | $6.9B | $6.0M | $167.0M | -$161.0M | -2.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -86.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.4% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$935.0M | 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 volatility
Operating cash flow dropped sharply from the previous quarter, falling to a minimal level despite steady revenue. This was the strongest observable factor behind the negative free cash flow.
If operating cash flow does not improve, free cash flow is likely to remain negative.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was stable, yet operating cash flow was very low relative to revenue, resulting in a negative free cash flow and a significantly lower free cash flow margin. Capital expenditure remained a material cash outflow.
Compared to the prior quarter, free cash flow swung from positive to negative, operating cash flow dropped substantially, and the margin weakened. Versus the same quarter last year, free cash flow deteriorated further, operating cash flow was lower, and capital expenditure was higher.
Monitor the trajectory of operating cash flow to see if it recovers, and track the use of proceeds from the subsidiary's follow-on offering on consolidated liquidity.