Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
In the current quarter, free cash flow turned positive after a negative prior quarter, though it remained well below the year-ago level. The improvement was driven by a shift in operating cash flow from negative to positive, while capital expenditure decreased.
- Revenue was lower than both the prior quarter and the year-ago quarter. Operating cash flow turned positive, resulting in positive free cash flow and a positive margin, compared to a negative margin in the prior quarter. However, the margin was significantly lower than the year-ago quarter.
- Compared to the immediately preceding quarter, free cash flow improved from negative to positive, driven by a substantial increase in operating cash flow and a reduction in capital expenditure. Relative to the same quarter one year earlier, free cash flow was lower, as operating cash flow was much lower despite lower capital expenditure.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.9B
Trailing twelve-month free cash flow.
Quarter free cash flow
$87.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$222.0M
Cash generated by operations before capital spending.
CapEx
$135.0M
Capital spending and related asset purchases.
FCF margin
3.2%
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 |
|---|---|---|---|---|---|
| 2022-12-31 | $3.2B | $7.0B | $204.0M | $6.8B | 216.5% |
| 2023-03-31 | $3.1B | -$2.9B | $182.0M | -$3.0B | -98.2% |
| 2023-06-30 | $3.1B | -$852.0M | $170.0M | -$1.0B | -32.9% |
| 2023-09-30 | $2.7B | $222.0M | $135.0M | $87.0M | 3.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 20.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 5.0% | 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 turnaround
Operating cash flow shifted from negative in the prior quarter to positive in the current quarter, which was the primary factor behind the positive free cash flow.
This turnaround enabled the company to generate positive free cash flow after a negative prior quarter.
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 year-ago quarter. Operating cash flow turned positive, resulting in positive free cash flow and a positive margin, compared to a negative margin in the prior quarter. However, the margin was significantly lower than the year-ago quarter.
Compared to the immediately preceding quarter, free cash flow improved from negative to positive, driven by a substantial increase in operating cash flow and a reduction in capital expenditure. Relative to the same quarter one year earlier, free cash flow was lower, as operating cash flow was much lower despite lower capital expenditure.
Monitor the trajectory of operating cash flow, given its significant swing from negative to positive in the current quarter.