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, driven by a sharp decline in operating cash flow despite revenue being stable. The cash conversion weakened significantly compared to both the prior quarter and the same quarter last year.
- Revenue was unchanged from the prior quarter, but operating cash flow shifted from positive to negative, resulting in a negative free cash flow margin. Capital expenditure was lower than the prior quarter but higher than a year ago, yet the drop in operating cash flow overwhelmed any benefit from reduced spending.
- Compared to the prior quarter, free cash flow moved from positive to negative, with operating cash flow lower and capital expenditure slightly lower. Versus the same quarter last year, revenue was higher but operating cash flow was lower, and free cash flow turned from positive to negative.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$661.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$137.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
-$98.0M
Cash generated by operations before capital spending.
CapEx
$39.0M
Capital spending and related asset purchases.
FCF margin
-3.7%
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 | $3.6B | $45.0M | $21.0M | $24.0M | 0.7% |
| 2022-09-30 | $3.6B | $729.0M | $27.0M | $702.0M | 19.6% |
| 2022-12-30 | $3.7B | $125.0M | $53.0M | $72.0M | 2.0% |
| 2023-03-31 | $3.7B | -$98.0M | $39.0M | -$137.0M | -3.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -83.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.1% | 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.
Operating Cash Flow Decline
Operating cash flow dropped from positive in both comparison periods to negative this quarter, while revenue remained stable. This was the strongest observable driver of the negative free cash flow.
The decline in operating cash flow directly caused free cash flow to turn negative, despite stable revenue and lower capital expenditure.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was unchanged from the prior quarter, but operating cash flow shifted from positive to negative, resulting in a negative free cash flow margin. Capital expenditure was lower than the prior quarter but higher than a year ago, yet the drop in operating cash flow overwhelmed any benefit from reduced spending.
Compared to the prior quarter, free cash flow moved from positive to negative, with operating cash flow lower and capital expenditure slightly lower. Versus the same quarter last year, revenue was higher but operating cash flow was lower, and free cash flow turned from positive to negative.
Monitor whether operating cash flow recovers to positive levels in the coming quarter, as it was the primary factor behind the negative free cash flow.