Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
The quarter's free cash flow was negative, driven by an operating cash outflow that was only partially offset by capital spending. Revenue was stable compared to the prior year, but the conversion into cash was significantly weakened.
- With negative operating cash flow and a high capital expenditure relative to that outflow, free cash flow was deeply negative and the free cash flow margin sharply declined from the prior periods.
- Compared to the immediately preceding quarter, operating cash flow reversed from a large positive to a large negative, while free cash flow shifted from positive to negative and the margin fell markedly. Versus the same quarter one year earlier, operating cash flow and free cash flow were both lower, turning from positive to negative.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$7.6B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$1.2B
Free cash flow in the selected fiscal quarter.
Operating cash flow
-$955.0M
Cash generated by operations before capital spending.
CapEx
$279.0M
Capital spending and related asset purchases.
FCF margin
-15.4%
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 |
|---|---|---|---|---|---|
| 2022-06-30 | $7.8B | $3.5B | $249.0M | $3.3B | 41.8% |
| 2022-09-30 | $8.0B | $3.1B | $252.0M | $2.8B | 35.1% |
| 2022-12-31 | $8.2B | $3.1B | $347.0M | $2.7B | 33.7% |
| 2023-03-31 | $8.0B | -$955.0M | $279.0M | -$1.2B | -15.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -61.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.5% | 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.
Sharp Operating Cash Flow Reversal
Operating cash flow turned from a large positive in the prior quarter to a large negative, which was the strongest observable driver of the negative free cash flow. The free cash flow margin worsened correspondingly.
This reversal directly caused free cash flow to move from positive to negative, the most significant change in the period.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
With negative operating cash flow and a high capital expenditure relative to that outflow, free cash flow was deeply negative and the free cash flow margin sharply declined from the prior periods.
Compared to the immediately preceding quarter, operating cash flow reversed from a large positive to a large negative, while free cash flow shifted from positive to negative and the margin fell markedly. Versus the same quarter one year earlier, operating cash flow and free cash flow were both lower, turning from positive to negative.
Monitor whether operating cash flow returns to positive levels in the coming quarter.