Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Operating cash flow improved versus the prior quarter and the year-ago quarter, but capital expenditure rose sequentially, resulting in a larger free cash flow deficit. The free cash flow margin weakened from the prior quarter but improved compared with the same quarter last year.
- Revenue was slightly lower than the prior quarter and the year-ago quarter. Operating cash flow was higher than the year-ago quarter but lower than the prior quarter. Capital expenditure increased sequentially, and free cash flow remained negative, with the margin narrowing from the year-ago quarter but widening from the prior quarter.
- Compared with the prior quarter, operating cash flow was lower and capital expenditure was higher, leading to a more negative free cash flow and a weaker margin. Versus the year-ago quarter, operating cash flow was higher and capital expenditure was higher, but free cash flow was less negative and the margin improved.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$656.6M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$378.8M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$344.9M
Cash generated by operations before capital spending.
CapEx
$723.7M
Capital spending and related asset purchases.
FCF margin
-37.8%
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 |
|---|---|---|---|---|---|
| 2022-12-31 | $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% |
| 2023-09-30 | $1.0B | $344.9M | $723.7M | -$378.8M | -37.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -445.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 72.2% | 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 with both the prior quarter and the year-ago quarter. This was the strongest observable driver of the change in free cash flow, as it more than offset the improvement in operating cash flow relative to the year-ago period.
Higher capital expenditure was the primary factor behind the sequential widening of the free cash flow deficit.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was slightly lower than the prior quarter and the year-ago quarter. Operating cash flow was higher than the year-ago quarter but lower than the prior quarter. Capital expenditure increased sequentially, and free cash flow remained negative, with the margin narrowing from the year-ago quarter but widening from the prior quarter.
Compared with the prior quarter, operating cash flow was lower and capital expenditure was higher, leading to a more negative free cash flow and a weaker margin. Versus the year-ago quarter, operating cash flow was higher and capital expenditure was higher, but free cash flow was less negative and the margin improved.
Monitor the relationship between capital expenditure and operating cash flow, as the sequential increase in capex outpaced the decline in operating cash flow, widening the free cash flow deficit.