Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Operating cash flow improved compared to the prior quarter, and capital expenditure moderated, narrowing the free cash flow deficit. However, free cash flow turned negative versus the same quarter last year, with a lower conversion from revenue.
- Revenue decreased relative to the preceding quarter, but operating cash flow increased, leading to an improved cash conversion rate. Capital expenditure was also lower, which helped reduce the free cash flow shortfall despite a negative margin.
- Compared to the prior quarter, free cash flow margin improved on higher operating cash flow and lower capital spending. Versus the same quarter a year ago, revenue grew but operating cash flow declined, and capital expenditure rose, pushing free cash flow from positive to negative.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$1.0B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$340.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$706.0M
Cash generated by operations before capital spending.
CapEx
$1.0B
Capital spending and related asset purchases.
FCF margin
-6.0%
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 | $6.7B | $1.9B | $987.0M | $919.0M | 13.7% |
| 2022-09-30 | $6.2B | $234.0M | $1.1B | -$838.0M | -13.5% |
| 2022-12-31 | $6.2B | $579.0M | $1.4B | -$777.0M | -12.6% |
| 2023-03-31 | $5.7B | $706.0M | $1.0B | -$340.0M | -6.0% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 213.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 18.3% | 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.
Free cash flow deficit narrowing
Compared to the prior quarter, a combination of increased operating cash flow and reduced capital expenditure materially narrowed the free cash flow shortfall. However, compared to the same period last year, the free cash flow position weakened.
Sustained improvement in operating cash flow will be critical to restore positive free cash flow.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue decreased relative to the preceding quarter, but operating cash flow increased, leading to an improved cash conversion rate. Capital expenditure was also lower, which helped reduce the free cash flow shortfall despite a negative margin.
Compared to the prior quarter, free cash flow margin improved on higher operating cash flow and lower capital spending. Versus the same quarter a year ago, revenue grew but operating cash flow declined, and capital expenditure rose, pushing free cash flow from positive to negative.
Monitor trends in air traffic liability and customer reimbursement payments, as these items have recently affected operating cash flows.