Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow remained negative in the current quarter, though the deficit narrowed compared to both the prior quarter and the same quarter last year. The improvement was driven by higher revenue and lower capital expenditure relative to the year-ago period.
- Revenue increased from the prior quarter and from the year-ago quarter, while operating cash flow was lower than both comparative periods. Capital expenditure decreased sequentially and significantly year over year, resulting in a free cash flow margin that improved from negative in both prior periods but remained negative.
- Compared to the immediately preceding quarter, free cash flow was lower (more negative) despite higher revenue, as operating cash flow declined. Versus the same quarter one year earlier, free cash flow improved (less negative) due to a substantial reduction in capital expenditure and higher revenue, even though operating cash flow was lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$358.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$283.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$425.0M
Cash generated by operations before capital spending.
CapEx
$708.0M
Capital spending and related asset purchases.
FCF margin
-4.1%
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 |
|---|---|---|---|---|---|
| 2023-03-31 | $5.7B | $706.0M | $1.0B | -$340.0M | -6.0% |
| 2023-06-30 | $7.0B | $1.4B | $925.0M | $491.0M | 7.0% |
| 2023-09-30 | $6.5B | $616.0M | $842.0M | -$226.0M | -3.5% |
| 2023-12-31 | $6.8B | $425.0M | $708.0M | -$283.0M | -4.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 112.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 10.4% | Lower capital intensity usually supports FCF margin. |
| Net cash | $1.3B | 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 reduction
Capital expenditure decreased from the prior quarter and was substantially lower than the year-ago quarter, which was the strongest observable factor narrowing the free cash flow deficit.
Lower capital expenditure directly reduced the cash outflow, improving free cash flow despite weaker operating cash conversion.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased from the prior quarter and from the year-ago quarter, while operating cash flow was lower than both comparative periods. Capital expenditure decreased sequentially and significantly year over year, resulting in a free cash flow margin that improved from negative in both prior periods but remained negative.
Compared to the immediately preceding quarter, free cash flow was lower (more negative) despite higher revenue, as operating cash flow declined. Versus the same quarter one year earlier, free cash flow improved (less negative) due to a substantial reduction in capital expenditure and higher revenue, even though operating cash flow was lower.
Monitor the trend in operating cash flow, which declined sequentially and year over year despite higher revenue.