Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned more negative compared to both the prior quarter and the same quarter last year, as capital expenditure increased while operating cash flow declined relative to the prior quarter.
- Revenue remained stable sequentially, but a lower operating cash flow combined with higher capital spending led to a weaker free cash conversion.
- Free cash flow weakened from the prior quarter due to lower operating cash flow and higher capital expenditure. Year over year, free cash flow also weakened as 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
-$207.2M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$141.3M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$220.3M
Cash generated by operations before capital spending.
CapEx
$361.5M
Capital spending and related asset purchases.
FCF margin
-10.2%
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 |
|---|---|---|---|---|---|
| 2022-12-31 | $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% |
| 2023-09-30 | $1.4B | $220.3M | $361.5M | -$141.3M | -10.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -154.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 26.0% | 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 Expenditure Growth
Capital expenditure increased compared to both the prior quarter and the same quarter a year ago, outpacing operating cash flow growth. The company's filing mentions a global transformation program that involves investment to accelerate growth.
The higher capital spending is the primary factor behind the decline in free cash flow.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue remained stable sequentially, but a lower operating cash flow combined with higher capital spending led to a weaker free cash conversion.
Free cash flow weakened from the prior quarter due to lower operating cash flow and higher capital expenditure. Year over year, free cash flow also weakened as capital expenditure grew more than operating cash flow.
Monitor trends in capital expenditure relative to operating cash flow, as the gap widened significantly.