Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow was negative in this quarter, with a slight improvement from the prior quarter but a sharp deterioration from the same quarter a year ago. Revenue was substantially lower, operating cash flow remained negative, and capital expenditure increased.
- With lower revenue and negative operating cash flow, combined with higher capital expenditure, cash conversion was deeply negative, resulting in a very low free cash flow margin.
- Compared to the immediate prior quarter, free cash flow improved modestly as negative operating cash flow narrowed, but revenue fell substantially. Versus the same quarter one year earlier, free cash flow swung from positive to negative and revenue declined sharply.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$754.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$1.1B
Free cash flow in the selected fiscal quarter.
Operating cash flow
-$915.0M
Cash generated by operations before capital spending.
CapEx
$234.0M
Capital spending and related asset purchases.
FCF margin
-334.0%
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 |
|---|---|---|---|---|---|
| 2022-09-30 | $3.4B | $252.0M | $89.0M | $163.0M | 4.8% |
| 2022-12-31 | $5.1B | $1.7B | $92.0M | $1.6B | 30.9% |
| 2023-03-31 | $1.9B | -$1.2B | $113.0M | -$1.3B | -71.9% |
| 2023-06-30 | $344.0M | -$915.0M | $234.0M | -$1.1B | -334.0% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 83.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 68.0% | 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.
Revenue Decline
Revenue decreased markedly compared to both the prior quarter and the same quarter a year ago, which was the most observable factor behind the negative free cash flow.
If revenue continues at a low level, free cash flow may remain under pressure.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
With lower revenue and negative operating cash flow, combined with higher capital expenditure, cash conversion was deeply negative, resulting in a very low free cash flow margin.
Compared to the immediate prior quarter, free cash flow improved modestly as negative operating cash flow narrowed, but revenue fell substantially. Versus the same quarter one year earlier, free cash flow swung from positive to negative and revenue declined sharply.
Monitor the trajectory of operating cash flow and the level of capital expenditure.