Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was higher than both the preceding quarter and the same quarter one year earlier, but the company generated negative free cash flow due to a sharp decline in operating cash flow. Capital expenditure was lower than the prior quarter yet higher than the year-ago period, though the drop in operating cash flow far outweighed the capex reduction.
- Operating cash flow was much lower than revenue, resulting in a negative free cash flow margin. Capital expenditure consumed a sizable portion of the already low operating cash flow, leaving free cash flow deeply negative.
- Compared with the preceding quarter, operating cash flow weakened sharply while capital expenditure also declined, but free cash flow turned from positive to negative. Versus the same quarter one year earlier, operating cash flow decreased, capital expenditure increased, and free cash flow dropped from positive to negative.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$9.0B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$116.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$160.0M
Cash generated by operations before capital spending.
CapEx
$276.0M
Capital spending and related asset purchases.
FCF margin
-1.1%
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 |
|---|---|---|---|---|---|
| 2022-07-01 | $11.3B | $3.9B | $270.0M | $3.7B | 32.3% |
| 2022-09-30 | $11.1B | $3.5B | $289.0M | $3.2B | 29.2% |
| 2022-12-31 | $10.1B | $3.0B | $708.0M | $2.2B | 22.1% |
| 2023-03-31 | $11.0B | $160.0M | $276.0M | -$116.0M | -1.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -3.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.5% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$24.9B | 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 decline
Operating cash flow in the current quarter was substantially lower than both the prior quarter and the year-ago quarter, despite revenue being higher. This single metric drove the free cash flow into negative territory.
The company's free cash flow turned from positive to negative, and the free cash flow margin shifted from positive to negative compared with both prior periods.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow was much lower than revenue, resulting in a negative free cash flow margin. Capital expenditure consumed a sizable portion of the already low operating cash flow, leaving free cash flow deeply negative.
Compared with the preceding quarter, operating cash flow weakened sharply while capital expenditure also declined, but free cash flow turned from positive to negative. Versus the same quarter one year earlier, operating cash flow decreased, capital expenditure increased, and free cash flow dropped from positive to negative.
Monitor the trajectory of operating cash flow, as its sharp decline was the primary factor behind the negative free cash flow.