Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was stable compared to a year ago, but operating cash flow turned positive from a negative position, leading to a smaller free cash flow deficit. Sequentially, revenue increased while operating cash flow and free cash flow declined sharply, resulting in a negative free cash flow margin.
- Operating cash flow was a small fraction of revenue, and capital expenditure exceeded operating cash flow, producing negative free cash flow and a negative free cash flow margin. This indicates that cash conversion from revenue was weak in the quarter.
- Compared to the prior quarter, revenue was higher but operating cash flow and free cash flow were lower, with free cash flow margin turning from positive to negative. Versus the same quarter last year, revenue was slightly higher, operating cash flow improved from negative to positive, and free cash flow deficit narrowed significantly.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$940.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$35.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$85.0M
Cash generated by operations before capital spending.
CapEx
$120.0M
Capital spending and related asset purchases.
FCF margin
-0.8%
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 |
|---|---|---|---|---|---|
| 2022-06-30 | $4.7B | $168.0M | $70.0M | $98.0M | 2.1% |
| 2022-09-30 | $4.5B | $512.0M | $104.0M | $408.0M | 9.1% |
| 2022-12-31 | $2.1B | $587.0M | $118.0M | $469.0M | 21.8% |
| 2023-03-31 | $4.4B | $85.0M | $120.0M | -$35.0M | -0.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -12.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.7% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$5.6B | 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 relative to operating cash flow
Capital expenditure was higher than operating cash flow, which was the primary observable factor behind the negative free cash flow. This relationship weakened cash conversion compared to the prior quarter.
The gap between capital expenditure and operating cash flow is the strongest driver of the negative free cash flow this quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow was a small fraction of revenue, and capital expenditure exceeded operating cash flow, producing negative free cash flow and a negative free cash flow margin. This indicates that cash conversion from revenue was weak in the quarter.
Compared to the prior quarter, revenue was higher but operating cash flow and free cash flow were lower, with free cash flow margin turning from positive to negative. Versus the same quarter last year, revenue was slightly higher, operating cash flow improved from negative to positive, and free cash flow deficit narrowed significantly.
Monitor whether capital expenditure continues to exceed operating cash flow, as this directly drives the negative free cash flow.