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 capital expenditure exceeding operating cash flow. Revenue was higher than the prior quarter but lower than the same quarter last year.
- Operating cash flow was lower than capital expenditure, resulting in negative free cash flow and a negative free cash flow margin. The conversion from revenue to free cash flow was weakened by the gap between operating cash flow and capital spending.
- Compared to the prior quarter, revenue improved while operating cash flow and capital expenditure were both higher, but free cash flow remained negative and slightly more negative. Versus the same quarter one year earlier, revenue, operating cash flow, and free cash flow were all lower, and capital expenditure was higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$481.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$255.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$710.0M
Cash generated by operations before capital spending.
CapEx
$965.0M
Capital spending and related asset purchases.
FCF margin
-9.8%
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 |
|---|---|---|---|---|---|
| 2023-03-31 | $3.8B | $1.8B | $739.0M | $1.1B | 29.2% |
| 2023-06-30 | $2.4B | $572.0M | $705.0M | -$133.0M | -5.5% |
| 2023-09-30 | $2.5B | $687.0M | $916.0M | -$229.0M | -9.3% |
| 2023-12-31 | $2.6B | $710.0M | $965.0M | -$255.0M | -9.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -46.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 37.0% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$19.2B | 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 outpacing operating cash flow
Capital expenditure was higher than operating cash flow in the current quarter, a pattern also seen in the prior quarter but more pronounced. This was the strongest observable driver of the negative free cash flow.
The excess of capital expenditure over operating cash flow directly caused free cash flow to remain negative.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow was lower than capital expenditure, resulting in negative free cash flow and a negative free cash flow margin. The conversion from revenue to free cash flow was weakened by the gap between operating cash flow and capital spending.
Compared to the prior quarter, revenue improved while operating cash flow and capital expenditure were both higher, but free cash flow remained negative and slightly more negative. Versus the same quarter one year earlier, revenue, operating cash flow, and free cash flow were all lower, and capital expenditure was higher.
Monitor the relationship between capital expenditure and operating cash flow, as the gap widened compared to both the prior quarter and the year-ago quarter.