Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was stable compared to the prior quarter and higher than a year ago, but operating cash flow weakened sharply, leading to negative free cash flow and a negative margin. The company attributed the result to higher capital expenditures, timing and historical seasonality, and investments in its growth strategy.
- Revenue was roughly level with the prior quarter and above the year-ago quarter. Operating cash flow fell substantially from both periods, while capital expenditure decreased from the prior quarter but was slightly higher than a year ago. The combination produced negative free cash flow and a negative margin.
- Compared to the immediately preceding quarter, free cash flow turned from positive to negative, driven by a steep decline in operating cash flow. Compared to the same quarter one year earlier, free cash flow remained negative and the deficit widened.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.0B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$84.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$87.0M
Cash generated by operations before capital spending.
CapEx
$171.0M
Capital spending and related asset purchases.
FCF margin
-0.4%
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 |
|---|---|---|---|---|---|
| 2022-12-31 | $18.6B | $344.9M | $142.4M | $202.5M | 1.1% |
| 2023-04-01 | $18.9B | $922.3M | $164.8M | $757.5M | 4.0% |
| 2023-07-01 | $19.7B | $1.4B | $318.5M | $1.1B | 5.7% |
| 2023-09-30 | $19.6B | $87.0M | $171.0M | -$84.0M | -0.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -16.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.9% | 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 sharply from both the prior quarter and the year-ago quarter, far outweighing the reduction in capital expenditure. This was the primary observable factor behind the negative free cash flow.
The decline in operating cash flow drove free cash flow into negative territory and widened the negative margin compared to the year-ago period.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was roughly level with the prior quarter and above the year-ago quarter. Operating cash flow fell substantially from both periods, while capital expenditure decreased from the prior quarter but was slightly higher than a year ago. The combination produced negative free cash flow and a negative margin.
Compared to the immediately preceding quarter, free cash flow turned from positive to negative, driven by a steep decline in operating cash flow. Compared to the same quarter one year earlier, free cash flow remained negative and the deficit widened.
Monitor the trajectory of operating cash flow in subsequent quarters, as the company cited timing and seasonality as factors affecting the current period.