Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue and operating cash flow both declined, while capital expenditure also decreased, resulting in a free cash flow deficit that widened relative to revenue. The free cash flow margin weakened compared to both the prior quarter and the same quarter last year.
- Operating cash flow as a proportion of revenue was lower than the prior quarter and substantially lower than the same quarter a year ago. Capital expenditure remained elevated relative to operating cash flow, producing a negative free cash flow margin.
- Compared to the immediately preceding quarter, revenue was lower and operating cash flow declined, while capital expenditure was reduced; free cash flow was more negative and the free cash flow margin weakened. Versus the same quarter one year earlier, revenue, operating cash flow, free cash flow, and the free cash flow margin were all lower, although capital expenditure was also lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$1.9B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$1.9B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$343.0M
Cash generated by operations before capital spending.
CapEx
$2.2B
Capital spending and related asset purchases.
FCF margin
-50.4%
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 |
|---|---|---|---|---|---|
| 2022-06-02 | $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% |
| 2023-03-02 | $3.7B | $343.0M | $2.2B | -$1.9B | -50.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 80.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 59.7% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$1.4B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Free Cash Flow Deficit Widened
Despite a reduction in capital expenditure, the decline in operating cash flow outpaced the spending cuts, causing free cash flow to become more negative. The free cash flow margin dropped from the prior quarter and was negative versus a positive level a year ago.
The proportion of revenue converted into free cash flow turned more negative, indicating a weakened cash generation profile.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a proportion of revenue was lower than the prior quarter and substantially lower than the same quarter a year ago. Capital expenditure remained elevated relative to operating cash flow, producing a negative free cash flow margin.
Compared to the immediately preceding quarter, revenue was lower and operating cash flow declined, while capital expenditure was reduced; free cash flow was more negative and the free cash flow margin weakened. Versus the same quarter one year earlier, revenue, operating cash flow, free cash flow, and the free cash flow margin were all lower, although capital expenditure was also lower.
Monitor the trajectory of capital expenditure relative to operating cash flow, as the gap between them remained wide this quarter.