Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow remained negative but improved significantly from the prior quarter, driven by a reduction in operating cash outflow. However, compared to the same quarter last year, free cash flow weakened as revenue grew but cash generation lagged.
- Revenue rose sequentially and year over year, while operating cash flow remained negative but improved from the prior quarter. Capital expenditure decreased relative to the previous quarter, contributing to a less negative free cash flow margin that nonetheless remained well below the year-ago level.
- Compared with the immediately preceding quarter, free cash flow and margin both improved as the operating cash outflow narrowed. Compared with the same quarter one year earlier, free cash flow and margin weakened substantially, reflecting a much larger operating cash deficit despite higher revenue.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$2.6B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$661.8M
Free cash flow in the selected fiscal quarter.
Operating cash flow
-$647.8M
Cash generated by operations before capital spending.
CapEx
$14.0M
Capital spending and related asset purchases.
FCF margin
-12.4%
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 |
|---|---|---|---|---|---|
| 2023-09-30 | $2.1B | $270.5M | $2.6M | $267.8M | 12.6% |
| 2023-12-31 | $3.7B | -$595.1M | $14.7M | -$609.8M | -16.6% |
| 2024-03-31 | $3.9B | -$1.5B | $92.9M | -$1.6B | -41.7% |
| 2024-06-30 | $5.4B | -$647.8M | $14.0M | -$661.8M | -12.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -222.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.3% | 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.
Improvement in operating cash flow
The sequential improvement in operating cash flow from a large deficit to a smaller deficit was the strongest observable driver of the less negative free cash flow. The filing attributes this to changes in working capital, specifically higher inventory for growing revenues and longer supply chain lead times.
If working capital requirements ease, operating cash flow could turn positive, materially improving free cash flow and margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue rose sequentially and year over year, while operating cash flow remained negative but improved from the prior quarter. Capital expenditure decreased relative to the previous quarter, contributing to a less negative free cash flow margin that nonetheless remained well below the year-ago level.
Compared with the immediately preceding quarter, free cash flow and margin both improved as the operating cash outflow narrowed. Compared with the same quarter one year earlier, free cash flow and margin weakened substantially, reflecting a much larger operating cash deficit despite higher revenue.
Monitor the trajectory of inventory levels and associated working capital requirements, as highlighted in the filing as a key driver of recent liquidity changes.