Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue increased compared to the same quarter last year, but operating cash flow turned more negative, leading to a larger free cash flow deficit and a weakened free cash flow margin. Sequentially, revenue declined sharply and cash flow metrics deteriorated significantly from the prior quarter.
- Despite higher revenue, operating cash flow was negative, and capital expenditure exceeded operating cash flow, resulting in negative free cash flow and a negative free cash flow margin. The conversion from revenue to cash was poor this quarter.
- Compared to the prior quarter, revenue was lower, operating cash flow swung from positive to negative, and free cash flow turned deeply negative. Versus the same quarter last year, revenue was higher, but operating cash flow was more negative, and free cash flow deficit widened.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.8B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$973.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
-$392.0M
Cash generated by operations before capital spending.
CapEx
$581.0M
Capital spending and related asset purchases.
FCF margin
-5.5%
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 |
|---|---|---|---|---|---|
| 2022-03-19 | $16.2B | -$174.0M | $522.0M | -$696.0M | -4.3% |
| 2022-06-11 | $20.2B | $2.1B | $977.0M | $1.1B | 5.3% |
| 2022-09-03 | $22.0B | $4.4B | $1.1B | $3.4B | 15.3% |
| 2023-03-25 | $17.8B | -$392.0M | $581.0M | -$973.0M | -5.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -50.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.3% | 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.
Negative Operating Cash Flow
Operating cash flow was negative this quarter, a significant weakening from the prior quarter's positive level and a further decline from the same quarter last year. This is the strongest observable driver of the free cash flow deficit.
Negative operating cash flow directly caused free cash flow to be negative, even before capital expenditure.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Despite higher revenue, operating cash flow was negative, and capital expenditure exceeded operating cash flow, resulting in negative free cash flow and a negative free cash flow margin. The conversion from revenue to cash was poor this quarter.
Compared to the prior quarter, revenue was lower, operating cash flow swung from positive to negative, and free cash flow turned deeply negative. Versus the same quarter last year, revenue was higher, but operating cash flow was more negative, and free cash flow deficit widened.
Monitor the trajectory of operating cash flow, as it turned negative this quarter despite higher revenue.