Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
In the current quarter, free cash flow turned negative as operating cash flow declined more sharply than capital expenditure compared to both the prior quarter and the same quarter last year. The free cash flow margin weakened significantly.
- Revenue was lower than both comparison periods, and operating cash flow as a proportion of revenue decreased, resulting in a cash conversion that was insufficient to cover capital spending.
- Compared to the immediately preceding quarter, revenue and operating cash flow were lower, capital expenditure was lower, and free cash flow shifted from positive to negative. Versus the same quarter one year earlier, revenue and operating cash flow were lower, capital expenditure was higher, and free cash flow also turned negative.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$787.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$45.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$481.0M
Cash generated by operations before capital spending.
CapEx
$526.0M
Capital spending and related asset purchases.
FCF margin
-1.7%
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 |
|---|---|---|---|---|---|
| 2022-06-30 | $3.1B | $1.0B | $519.0M | $524.0M | 17.1% |
| 2022-09-30 | $2.6B | $473.0M | $529.0M | -$56.0M | -2.1% |
| 2022-12-31 | $3.2B | $1.0B | $646.0M | $364.0M | 11.4% |
| 2023-03-31 | $2.7B | $481.0M | $526.0M | -$45.0M | -1.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -12.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 19.6% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$2.9B | 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 compared to both the prior quarter and the year-ago quarter, while capital expenditure remained elevated relative to revenue. This combination drove free cash flow negative.
The company's ability to generate positive free cash flow depends on restoring operating cash flow levels.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was lower than both comparison periods, and operating cash flow as a proportion of revenue decreased, resulting in a cash conversion that was insufficient to cover capital spending.
Compared to the immediately preceding quarter, revenue and operating cash flow were lower, capital expenditure was lower, and free cash flow shifted from positive to negative. Versus the same quarter one year earlier, revenue and operating cash flow were lower, capital expenditure was higher, and free cash flow also turned negative.
Monitor the trend in operating cash flow relative to revenue to assess whether cash conversion can improve.