Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Cash conversion was negative this quarter, driven by operating cash outflow and modest capital spending. Free cash flow margin turned negative, reversing the prior quarter's strong positive performance, though it was less negative than the same quarter last year.
- Revenue held relatively stable while operating cash flow swung from positive to negative, producing negative free cash flow. Capital expenditure increased slightly but remained a small factor in the conversion outcome.
- Compared to the preceding quarter, operating cash flow and free cash flow both weakened sharply, and the free cash flow margin dropped from positive to negative. Versus the same quarter one year earlier, operating cash flow improved (less negative) and free cash flow also improved, with a less negative margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$2.8M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$19.1M
Free cash flow in the selected fiscal quarter.
Operating cash flow
-$18.5M
Cash generated by operations before capital spending.
CapEx
$639000
Capital spending and related asset purchases.
FCF margin
-15.9%
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 | $125.4M | -$1.5M | $332000 | -$1.8M | -1.4% |
| 2022-12-31 | $132.6M | -$18.2M | $635000 | -$18.8M | -14.2% |
| 2023-03-31 | $121.9M | $37.4M | $499000 | $36.9M | 30.3% |
| 2023-06-30 | $120.4M | -$18.5M | $639000 | -$19.1M | -15.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -85.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.5% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$2.1B | 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 Swing
The most observable shift is operating cash flow moving from positive in the prior quarter to negative in the current quarter. This change alone drove the corresponding swing in free cash flow and margin, as revenue and capital expenditure were relatively stable.
The negative operating cash flow directly caused free cash flow to turn negative, reversing the prior quarter's cash generation.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue held relatively stable while operating cash flow swung from positive to negative, producing negative free cash flow. Capital expenditure increased slightly but remained a small factor in the conversion outcome.
Compared to the preceding quarter, operating cash flow and free cash flow both weakened sharply, and the free cash flow margin dropped from positive to negative. Versus the same quarter one year earlier, operating cash flow improved (less negative) and free cash flow also improved, with a less negative margin.
Monitor the trajectory of operating cash flow, which swung from positive to negative quarter over quarter.