Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow remained negative but improved significantly from the prior quarter, driven by higher operating cash flow. Capital spending increased substantially compared to a year ago, turning free cash flow from positive to negative.
- Revenue rose while operating cash flow improved, but capital expenditure exceeded operating cash flow, resulting in negative free cash flow and a negative margin. The cash conversion was constrained by elevated investment spending.
- Compared with the prior quarter, free cash flow margin improved as operating cash flow rose and the gap with capital spending narrowed. Versus the same quarter a year earlier, the margin weakened because capital expenditure grew more than operating cash flow.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$118.1M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$17.6M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$317.3M
Cash generated by operations before capital spending.
CapEx
$334.9M
Capital spending and related asset purchases.
FCF margin
-1.3%
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 | $1.3B | $214.4M | $266.6M | -$52.1M | -4.1% |
| 2022-12-31 | $1.3B | $367.3M | $278.6M | $88.8M | 6.9% |
| 2023-03-31 | $1.3B | $128.8M | $265.9M | -$137.1M | -10.4% |
| 2023-06-30 | $1.4B | $317.3M | $334.9M | -$17.6M | -1.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -1536.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 24.7% | 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.
Capital Spending Surge
Capital expenditure increased sharply compared to both the prior quarter and the year-ago period, more than offsetting the growth in operating cash flow. The company is executing a global program to transform its operating model, which likely drives the elevated investment.
The sustained high capital spending is the strongest observable driver of the negative free cash flow.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue rose while operating cash flow improved, but capital expenditure exceeded operating cash flow, resulting in negative free cash flow and a negative margin. The cash conversion was constrained by elevated investment spending.
Compared with the prior quarter, free cash flow margin improved as operating cash flow rose and the gap with capital spending narrowed. Versus the same quarter a year earlier, the margin weakened because capital expenditure grew more than operating cash flow.
The trajectory of capital expenditure remains key to monitor, as its elevated level is the primary factor pressuring free cash flow.