Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Operating cash flow was insufficient to cover capital spending, resulting in negative free cash flow for the quarter. The deficit narrowed compared to the prior quarter but reversed from a positive position a year ago.
- Revenue was lower than both the prior quarter and the same quarter a year earlier. Operating cash flow declined sharply from both periods, while capital expenditure decreased from the prior quarter but increased from a year ago. Free cash flow remained negative, with the margin improving slightly versus the prior quarter but weakening significantly compared to a year ago.
- Compared to the immediately preceding quarter, revenue, operating cash flow, and capital expenditure were all lower, while free cash flow was less negative and the margin improved. Relative to the same quarter one year earlier, revenue was slightly lower, operating cash flow was lower, capital expenditure was higher, and free cash flow turned from positive to negative, leading to a weaker margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$2.8B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$1.0B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$844.0M
Cash generated by operations before capital spending.
CapEx
$1.9B
Capital spending and related asset purchases.
FCF margin
-15.5%
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 | $7.2B | $2.0B | $1.8B | $193.0M | 2.7% |
| 2022-09-30 | $8.4B | $1.4B | $2.3B | -$851.0M | -10.2% |
| 2022-12-31 | $7.0B | $1.3B | $2.4B | -$1.1B | -16.1% |
| 2023-03-31 | $6.5B | $844.0M | $1.9B | -$1.0B | -15.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -125.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 28.5% | 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.
Operating cash flow decline
Operating cash flow decreased compared to both the prior quarter and the same period a year ago, while capital expenditure rose relative to the year-ago quarter. These combined factors drove the shift to negative free cash flow.
The decline in operating cash flow was the primary factor behind the negative free cash flow and the reversal from a positive position a year ago.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was lower than both the prior quarter and the same quarter a year earlier. Operating cash flow declined sharply from both periods, while capital expenditure decreased from the prior quarter but increased from a year ago. Free cash flow remained negative, with the margin improving slightly versus the prior quarter but weakening significantly compared to a year ago.
Compared to the immediately preceding quarter, revenue, operating cash flow, and capital expenditure were all lower, while free cash flow was less negative and the margin improved. Relative to the same quarter one year earlier, revenue was slightly lower, operating cash flow was lower, capital expenditure was higher, and free cash flow turned from positive to negative, leading to a weaker margin.
Monitor the trajectory of operating cash flow, as it declined materially from both comparative periods.