Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
In the first quarter of fiscal 2023, the company's free cash flow was negative, reflecting operating cash outflows that far exceeded minimal revenue. The free cash flow margin remained deeply negative, consistent with the early-stage nature of the business.
- Revenue was minimal, and operating cash flow was significantly negative, resulting in a deeply negative free cash flow margin. Capital expenditure was small relative to operating cash outflows, so the conversion was primarily driven by operating activities.
- Compared to both the prior quarter and the same quarter one year earlier, free cash flow weakened, driven by more negative operating cash flow and modestly higher capital expenditure. Revenue was also lower in both comparisons.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$140.5M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$46.7M
Free cash flow in the selected fiscal quarter.
Operating cash flow
-$46.4M
Cash generated by operations before capital spending.
CapEx
$372000
Capital spending and related asset purchases.
FCF margin
-222557.1%
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 |
|---|---|---|---|---|---|
| 2022-06-30 | $73000 | -$28.6M | $70000 | -$28.7M | -39331.5% |
| 2022-09-30 | $297000 | -$29.6M | $171000 | -$29.8M | -10017.8% |
| 2022-12-31 | $103000 | -$35.2M | $140000 | -$35.3M | -34292.2% |
| 2023-03-31 | $21000 | -$46.4M | $372000 | -$46.7M | -222557.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 122.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1771.4% | Lower capital intensity usually supports FCF margin. |
| Net cash | $61.4M | 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 burn
The increase in net cash used in operating activities was the primary observable factor behind the lower free cash flow. The company's filings note that cash from financing activities, including a public offering and warrant exercises, provided liquidity that partially offset this use.
The sustained operating cash burn is a key factor in evaluating the company's ability to fund its operations without additional financing.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was minimal, and operating cash flow was significantly negative, resulting in a deeply negative free cash flow margin. Capital expenditure was small relative to operating cash outflows, so the conversion was primarily driven by operating activities.
Compared to both the prior quarter and the same quarter one year earlier, free cash flow weakened, driven by more negative operating cash flow and modestly higher capital expenditure. Revenue was also lower in both comparisons.
Monitor the trend in operating cash outflows and the cash and marketable securities balance to assess near-term liquidity needs.