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 remained negative but improved compared to the same period last year, while turning negative from the prior quarter. The cash conversion was driven by a lower operating cash flow relative to a higher capital expenditure than the previous quarter.
- Revenue declined from the prior quarter, and operating cash flow also decreased, while capital expenditure increased, resulting in free cash flow turning negative. The free cash flow margin worsened sequentially but improved year over year.
- Compared to the immediately preceding quarter, free cash flow shifted from positive to negative, driven by lower revenue and operating cash flow combined with higher capital expenditure. Versus the same quarter a year ago, free cash flow was less negative, as operating cash flow increased and capital expenditure also rose, but the margin improved.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$754.8M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$97.2M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$507.6M
Cash generated by operations before capital spending.
CapEx
$604.8M
Capital spending and related asset purchases.
FCF margin
-9.1%
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 |
|---|---|---|---|---|---|
| 2022-09-30 | $1.1B | $129.0M | $606.0M | -$477.0M | -45.1% |
| 2022-12-31 | $1.7B | $373.2M | $680.1M | -$306.9M | -18.2% |
| 2023-03-31 | $1.9B | $683.4M | $557.1M | $126.3M | 6.7% |
| 2023-06-30 | $1.1B | $507.6M | $604.8M | -$97.2M | -9.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -165.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 56.7% | Lower capital intensity usually supports FCF margin. |
| Net cash | n/a | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Capital Expenditure Increase
Capital expenditure rose compared to both the prior quarter and the same quarter a year ago, while operating cash flow declined sequentially. This combination led to a negative free cash flow.
The higher capital expenditure, when paired with lower operating cash flow, resulted in a weakened free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue declined from the prior quarter, and operating cash flow also decreased, while capital expenditure increased, resulting in free cash flow turning negative. The free cash flow margin worsened sequentially but improved year over year.
Compared to the immediately preceding quarter, free cash flow shifted from positive to negative, driven by lower revenue and operating cash flow combined with higher capital expenditure. Versus the same quarter a year ago, free cash flow was less negative, as operating cash flow increased and capital expenditure also rose, but the margin improved.
Monitor the trend of capital expenditure relative to operating cash flow, as the gap widened in the current quarter.