Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue and operating cash flow fell sharply, while capital expenditure, though lower than the prior quarter, remained high relative to operating cash flow, producing a large negative free cash flow and negative margin. Compared with both the immediately preceding quarter and the same quarter one year earlier, free cash flow and margin worsened significantly, turning from positive to negative.
- Revenue declined materially, and operating cash flow contracted even more sharply, resulting in a negative free cash flow margin of minus thirty-seven percent. Capital expenditure, while lower than the prior quarter, still exceeded operating cash flow, reinforcing the negative cash conversion.
- Sequentially, free cash flow dropped from a positive level to a large negative figure, and the margin weakened from positive to negative. Year-over-year, the decline was even more pronounced, with free cash flow moving from positive to deeply negative and margin contracting by over forty percentage points.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$935.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$1.5B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$943.0M
Cash generated by operations before capital spending.
CapEx
$2.4B
Capital spending and related asset purchases.
FCF margin
-36.9%
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 |
|---|---|---|---|---|---|
| 2022-03-03 | $7.8B | $3.6B | $2.6B | $1.0B | 13.1% |
| 2022-06-02 | $8.6B | $3.8B | $2.6B | $1.3B | 14.6% |
| 2022-09-01 | $6.6B | $3.8B | $3.6B | $164.0M | 2.5% |
| 2022-12-01 | $4.1B | $943.0M | $2.4B | -$1.5B | -36.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 772.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 60.0% | Lower capital intensity usually supports FCF margin. |
| Net cash | $223.0M | 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 decline
Operating cash flow decreased substantially from both the prior quarter and the year-ago quarter, while capital expenditure, though lower, still exceeded operating cash flow. This shift drove free cash flow deeply negative.
The weakened cash generation capacity resulted in a negative free cash flow margin, a significant departure from the positive margins in the comparable periods.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue declined materially, and operating cash flow contracted even more sharply, resulting in a negative free cash flow margin of minus thirty-seven percent. Capital expenditure, while lower than the prior quarter, still exceeded operating cash flow, reinforcing the negative cash conversion.
Sequentially, free cash flow dropped from a positive level to a large negative figure, and the margin weakened from positive to negative. Year-over-year, the decline was even more pronounced, with free cash flow moving from positive to deeply negative and margin contracting by over forty percentage points.
Monitor the relationship between capital expenditure and operating cash flow, as spending remained high relative to shrinking cash from operations.