Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue increased both sequentially and compared to the same quarter a year earlier. Operating cash flow became more negative, but a sharp reduction in capital expenditure led to an improved free cash flow margin relative to both prior periods.
- Revenue rose, but operating cash flow turned more negative, indicating a weakening in cash conversion from revenue to operating cash. However, the substantial drop in capital expenditure helped free cash flow improve from the prior quarter, partially offsetting the larger operating cash outflow.
- Compared to the previous quarter, revenue was higher and free cash flow was less negative, with a substantially improved free cash flow margin. Versus the same quarter a year earlier, revenue was higher but operating cash flow was more negative, while free cash flow was slightly more negative, though the margin improved significantly.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$20.5M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$5.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
-$5.0M
Cash generated by operations before capital spending.
CapEx
$53000
Capital spending and related asset purchases.
FCF margin
-6693.3%
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 | $121000 | -$4.3M | $379000 | -$4.7M | -3865.3% |
| 2023-06-30 | $112000 | -$4.6M | $202000 | -$4.8M | -4308.0% |
| 2023-09-30 | $50000 | -$4.4M | $1.6M | -$6.0M | -12022.0% |
| 2023-12-31 | $75000 | -$5.0M | $53000 | -$5.0M | -6693.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 75.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 70.7% | 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 reduction
Capital expenditure decreased sharply from the prior quarter, reducing the total cash outflow and partially offsetting the increase in operating cash outflow. This was the most notable change among the reported metrics.
The reduction in capital spending was the primary factor that allowed free cash flow to improve sequentially despite a larger operating cash deficit.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue rose, but operating cash flow turned more negative, indicating a weakening in cash conversion from revenue to operating cash. However, the substantial drop in capital expenditure helped free cash flow improve from the prior quarter, partially offsetting the larger operating cash outflow.
Compared to the previous quarter, revenue was higher and free cash flow was less negative, with a substantially improved free cash flow margin. Versus the same quarter a year earlier, revenue was higher but operating cash flow was more negative, while free cash flow was slightly more negative, though the margin improved significantly.
Monitor the trajectory of operating cash flow, as it continued to be negative and increased in outflow compared to both prior periods.