Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow was negative this quarter, driven by operating cash flow that was also negative and capital expenditure that was higher than the prior quarter. Compared to the same quarter last year, free cash flow was more negative, while revenue was lower and the free cash flow margin weakened.
- Revenue was positive, but operating cash flow was negative, resulting in a negative free cash flow and a negative free cash flow margin. Capital expenditure exceeded operating cash flow, further reducing free cash flow.
- Compared to the immediately preceding quarter, revenue was lower, operating cash flow shifted from positive to negative, capital expenditure was higher, and free cash flow turned from positive to negative. Compared to the same quarter one year earlier, revenue was lower, operating cash flow was more negative, capital expenditure was higher, and free cash flow was more negative.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$695.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$179.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
-$55.0M
Cash generated by operations before capital spending.
CapEx
$124.0M
Capital spending and related asset purchases.
FCF margin
-8.8%
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 | $2.5B | $192.0M | $113.0M | $79.0M | 3.1% |
| 2023-03-31 | $2.4B | $509.0M | $133.0M | $376.0M | 15.4% |
| 2023-06-30 | $566.0M | $422.0M | $3.0M | $419.0M | 74.0% |
| 2023-09-30 | $2.0B | -$55.0M | $124.0M | -$179.0M | -8.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -596.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 6.1% | 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.
Negative Operating Cash Flow
Operating cash flow was negative this quarter, a shift from positive in the prior quarter and more negative than the same quarter last year. This was the strongest observable driver of the negative free cash flow.
Negative operating cash flow directly contributed to the negative free cash flow, despite revenue being positive.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was positive, but operating cash flow was negative, resulting in a negative free cash flow and a negative free cash flow margin. Capital expenditure exceeded operating cash flow, further reducing free cash flow.
Compared to the immediately preceding quarter, revenue was lower, operating cash flow shifted from positive to negative, capital expenditure was higher, and free cash flow turned from positive to negative. Compared to the same quarter one year earlier, revenue was lower, operating cash flow was more negative, capital expenditure was higher, and free cash flow was more negative.
Monitor the level of capital expenditure relative to operating cash flow, as it was a significant outflow this quarter.