Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
The company's free cash flow was negative in the quarter, driven by heavy capital spending that outpaced operating cash flow. Revenue increased compared to the same quarter last year but operating cash flow declined, while capital expenditure rose.
- Revenue was lower than the prior quarter but higher than the year-ago quarter. Operating cash flow was slightly higher than the prior quarter but significantly lower than the year-ago quarter. Capital expenditure was higher than both prior periods, resulting in a free cash flow that was more negative than both the prior quarter and the year-ago quarter, reflecting a widened gap between cash from operations and investment spending.
- Compared to the immediately preceding quarter, revenue decreased while operating cash flow was stable, but capital expenditure increased, leading to a more negative free cash flow and a weakened margin. Compared to the same quarter one year earlier, revenue improved, but operating cash flow weakened substantially and capital expenditure increased, resulting in a much larger negative free cash flow and a lower margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$648.6M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$233.6M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$211.6M
Cash generated by operations before capital spending.
CapEx
$445.2M
Capital spending and related asset purchases.
FCF margin
-24.7%
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 | $1.1B | $247.7M | $451.6M | -$204.0M | -19.2% |
| 2022-09-30 | $1.5B | $443.6M | $433.6M | $10.0M | 0.7% |
| 2022-12-31 | $1.0B | $209.5M | $430.6M | -$221.1M | -21.9% |
| 2023-03-31 | $945.0M | $211.6M | $445.2M | -$233.6M | -24.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -23148.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 47.1% | 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.
Capital Expenditure Growth
Capital expenditure increased sequentially and year over year, outpacing the growth in operating cash flow. This trend is a key observable factor behind the larger negative free cash flow.
The higher capital spending contributed to the expansion of negative free cash flow in the quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was lower than the prior quarter but higher than the year-ago quarter. Operating cash flow was slightly higher than the prior quarter but significantly lower than the year-ago quarter. Capital expenditure was higher than both prior periods, resulting in a free cash flow that was more negative than both the prior quarter and the year-ago quarter, reflecting a widened gap between cash from operations and investment spending.
Compared to the immediately preceding quarter, revenue decreased while operating cash flow was stable, but capital expenditure increased, leading to a more negative free cash flow and a weakened margin. Compared to the same quarter one year earlier, revenue improved, but operating cash flow weakened substantially and capital expenditure increased, resulting in a much larger negative free cash flow and a lower margin.
Monitor the level of capital expenditure relative to operating cash flow, as the gap continues to widen.