Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
The company's cash conversion was negative in the current quarter, as operating cash flow fell short of capital expenditure, resulting in a negative free cash flow margin. Revenue declined from both the preceding quarter and the same quarter one year earlier, while free cash flow improved compared with the year-ago period but weakened sequentially.
- Revenue was lower than the preceding quarter, while operating cash flow also decreased sequentially. Capital expenditure exceeded operating cash flow, producing a negative free cash flow and a corresponding negative margin.
- Compared with the preceding quarter, revenue and operating cash flow were lower, capital expenditure was higher, and free cash flow weakened from near breakeven to a larger deficit. Compared with the same quarter one year earlier, revenue was lower, operating cash flow was higher, capital expenditure was higher, and free cash flow improved (less negative).
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$638.7M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$158.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$373.8M
Cash generated by operations before capital spending.
CapEx
$531.8M
Capital spending and related asset purchases.
FCF margin
-15.9%
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 | $945.0M | $211.6M | $445.2M | -$233.6M | -24.7% |
| 2023-06-30 | $1.1B | $226.0M | $473.0M | -$247.0M | -22.0% |
| 2023-09-30 | $1.6B | $396.3M | $396.3M | -$48000 | -0.0% |
| 2023-12-31 | $991.6M | $373.8M | $531.8M | -$158.0M | -15.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -3690.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 53.6% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$8.4B | 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 Level
Capital expenditure in the current quarter rose relative to both the preceding quarter and the year-ago quarter. It was the largest single component driving free cash flow below operating cash flow.
Elevated capital expenditure kept free cash flow negative despite a year-over-year improvement in operating cash flow.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was lower than the preceding quarter, while operating cash flow also decreased sequentially. Capital expenditure exceeded operating cash flow, producing a negative free cash flow and a corresponding negative margin.
Compared with the preceding quarter, revenue and operating cash flow were lower, capital expenditure was higher, and free cash flow weakened from near breakeven to a larger deficit. Compared with the same quarter one year earlier, revenue was lower, operating cash flow was higher, capital expenditure was higher, and free cash flow improved (less negative).
Monitor whether capital expenditure continues to exceed operating cash flow, as this is the primary factor behind the negative free cash flow.