Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue increased both sequentially and year-over-year, but operating cash flow fell sharply from the prior quarter, resulting in negative free cash flow and a negative free cash flow margin. Capital expenditure was lower than the year-ago quarter but remained significant relative to operating cash flow.
- Operating cash flow of one hundred forty-three million dollars converted poorly into free cash flow after capital expenditure of one point one billion dollars, producing a negative free cash flow margin. Revenue was twelve point nine billion dollars.
- Compared to the prior quarter, operating cash flow decreased substantially, while capital expenditure was slightly lower, causing free cash flow to swing from positive to negative. Versus the same quarter one year earlier, operating cash flow weakened, but capital expenditure was lower, and free cash flow improved from a larger negative position.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$10.1B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$937.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$143.0M
Cash generated by operations before capital spending.
CapEx
$1.1B
Capital spending and related asset purchases.
FCF margin
-7.2%
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 |
|---|---|---|---|---|---|
| 2023-02-28 | $12.4B | $4.3B | $2.6B | $1.6B | 13.3% |
| 2023-05-31 | $13.8B | $5.6B | $1.9B | $3.7B | 27.0% |
| 2023-08-31 | $12.5B | $7.0B | $1.3B | $5.7B | 45.5% |
| 2023-11-30 | $12.9B | $143.0M | $1.1B | -$937.0M | -7.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -37.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 8.3% | 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.
Operating cash flow decline
Operating cash flow decreased sharply from the prior quarter and was lower than the year-ago quarter, despite higher revenue. This shift was the strongest observable factor behind the negative free cash flow.
Free cash flow turned negative as operating cash flow was insufficient to fund capital expenditure.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow of one hundred forty-three million dollars converted poorly into free cash flow after capital expenditure of one point one billion dollars, producing a negative free cash flow margin. Revenue was twelve point nine billion dollars.
Compared to the prior quarter, operating cash flow decreased substantially, while capital expenditure was slightly lower, causing free cash flow to swing from positive to negative. Versus the same quarter one year earlier, operating cash flow weakened, but capital expenditure was lower, and free cash flow improved from a larger negative position.
Monitor the relationship between operating cash flow and capital expenditure, as operating cash flow fell to a level insufficient to cover capital spending.