Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue improved from the prior quarter but remained far below the year-ago level. Operating cash flow turned positive and strengthened sequentially, yet after large capital expenditure the free cash flow was still negative with a narrower margin than in the prior quarter.
- Revenue increased while operating cash flow shifted from a minimal level to a positive amount, leading to a free cash flow that was less negative than the previous quarter. The free cash flow margin improved from the prior quarter but remained negative, indicating that capital expenditure continued to absorb a significant portion of operating cash flow.
- Compared with the immediately preceding quarter, revenue was higher, operating cash flow was significantly higher, capital expenditure was slightly lower, and free cash flow improved to a smaller negative. Compared with the same quarter one year earlier, revenue was lower, operating cash flow was much lower, capital expenditure was lower, and free cash flow shifted from positive to negative.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$6.1B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$1.2B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$249.0M
Cash generated by operations before capital spending.
CapEx
$1.5B
Capital spending and related asset purchases.
FCF margin
-30.2%
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 |
|---|---|---|---|---|---|
| 2022-12-01 | $4.1B | $943.0M | $2.4B | -$1.5B | -36.9% |
| 2023-03-02 | $3.7B | $343.0M | $2.2B | -$1.9B | -50.4% |
| 2023-06-01 | $3.8B | $24.0M | $1.6B | -$1.5B | -41.0% |
| 2023-08-31 | $4.0B | $249.0M | $1.5B | -$1.2B | -30.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 84.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 36.4% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$3.5B | 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 recovery
Operating cash flow improved from near zero in the prior quarter to a positive amount, reflecting a sequential turnaround in cash generation from operations. This was the strongest observable driver for the less negative free cash flow.
It enabled the company to reduce its free cash flow deficit despite continued high capital expenditure.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased while operating cash flow shifted from a minimal level to a positive amount, leading to a free cash flow that was less negative than the previous quarter. The free cash flow margin improved from the prior quarter but remained negative, indicating that capital expenditure continued to absorb a significant portion of operating cash flow.
Compared with the immediately preceding quarter, revenue was higher, operating cash flow was significantly higher, capital expenditure was slightly lower, and free cash flow improved to a smaller negative. Compared with the same quarter one year earlier, revenue was lower, operating cash flow was much lower, capital expenditure was lower, and free cash flow shifted from positive to negative.
Monitor operating cash flow trend given its high dependence on selling prices as noted in the filing, and the magnitude of capital expenditure relative to operating cash flow.