Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue improved compared to both the prior quarter and the year-ago quarter, while operating cash flow and free cash flow remained negative. Free cash flow margin weakened versus the same quarter last year but improved from the preceding quarter.
- Revenue increased, but operating cash flow and free cash flow remained negative, resulting in a negative free cash flow margin. Capital expenditure was higher than both comparison periods, contributing to the negative free cash flow.
- Compared to the prior quarter, revenue was higher and operating cash flow improved (less negative), resulting in improved free cash flow and free cash flow margin. Versus the same quarter one year ago, revenue was higher, but operating cash flow weakened (more negative) and capital expenditure increased, causing free cash flow and free cash flow margin to weaken substantially.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$9.9M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$8.8M
Free cash flow in the selected fiscal quarter.
Operating cash flow
-$7.4M
Cash generated by operations before capital spending.
CapEx
$1.5M
Capital spending and related asset purchases.
FCF margin
-6.8%
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 |
|---|---|---|---|---|---|
| 2022-12-31 | $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% |
| 2023-09-30 | $129.5M | -$7.4M | $1.5M | -$8.8M | -6.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 6.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.1% | 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.
Weakening cash conversion
Free cash flow margin turned more negative compared to the year-ago quarter, despite higher revenue, indicating that cash conversion from revenue has weakened. The largest observable driver of this change is the decline in operating cash flow relative to revenue.
If this trend continues, free cash flow may remain negative even if revenue grows further.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased, but operating cash flow and free cash flow remained negative, resulting in a negative free cash flow margin. Capital expenditure was higher than both comparison periods, contributing to the negative free cash flow.
Compared to the prior quarter, revenue was higher and operating cash flow improved (less negative), resulting in improved free cash flow and free cash flow margin. Versus the same quarter one year ago, revenue was higher, but operating cash flow weakened (more negative) and capital expenditure increased, causing free cash flow and free cash flow margin to weaken substantially.
Monitor the relationship between revenue growth and operating cash flow, as revenue increased while cash from operations remained negative.