Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue and operating cash flow were lower than the prior quarter but higher than the same quarter last year. Free cash flow turned negative, driven by a large capital expenditure, resulting in a weakened free cash flow margin.
- Operating cash flow as a percentage of revenue was lower than both the prior quarter and the year-ago quarter, indicating a weakened cash conversion rate. The combination of operating cash flow and a significantly higher capital expenditure produced negative free cash flow and a negative margin.
- Compared to the prior quarter, revenue and operating cash flow were lower, while capital expenditure was substantially higher, flipping free cash flow from positive to negative. Compared to the same quarter last year, revenue and operating cash flow were higher, but capital expenditure was much higher, turning free cash flow from positive to negative and weakening the margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$580.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$1.5B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.1B
Cash generated by operations before capital spending.
CapEx
$2.6B
Capital spending and related asset purchases.
FCF margin
-43.6%
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 | $2.9B | $1.3B | $252.0M | $1.1B | 36.7% |
| 2023-06-30 | $3.5B | $1.4B | $796.0M | $596.0M | 16.9% |
| 2023-09-30 | $4.2B | $659.0M | $281.0M | $378.0M | 9.1% |
| 2023-12-31 | $3.3B | $1.1B | $2.6B | -$1.5B | -43.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -524.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 77.1% | 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 Surge
Capital expenditure was substantially higher than both the prior quarter and the year-ago quarter, far exceeding operating cash flow and driving free cash flow deeply negative.
The elevated capital expenditure was the strongest observable driver of the negative free cash flow and weakened margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a percentage of revenue was lower than both the prior quarter and the year-ago quarter, indicating a weakened cash conversion rate. The combination of operating cash flow and a significantly higher capital expenditure produced negative free cash flow and a negative margin.
Compared to the prior quarter, revenue and operating cash flow were lower, while capital expenditure was substantially higher, flipping free cash flow from positive to negative. Compared to the same quarter last year, revenue and operating cash flow were higher, but capital expenditure was much higher, turning free cash flow from positive to negative and weakening the margin.
Monitor the level of capital expenditure in future quarters, as its increase was the primary factor behind the negative free cash flow.