Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow was negative in the current quarter, a sharp reversal from the prior quarter's positive result, though it improved compared to the same quarter last year. The company's filing indicates it believes its cash and equivalents, operating cash flows, and borrowings will be adequate for near-term obligations.
- Revenue was lower than the prior quarter but higher than a year ago. Operating cash flow, while positive, was very low relative to revenue, resulting in a negative free cash flow margin after capital expenditure.
- Compared to the prior quarter, revenue, operating cash flow, and free cash flow all declined, and the free cash flow margin turned negative. Versus the same quarter last year, revenue and operating cash flow improved, capital expenditure was lower, and free cash flow was less negative.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.0B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$178.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$3.4M
Cash generated by operations before capital spending.
CapEx
$181.4M
Capital spending and related asset purchases.
FCF margin
-6.4%
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 |
|---|---|---|---|---|---|
| 2022-06-30 | $3.5B | $786.1M | $144.9M | $641.2M | 18.3% |
| 2022-09-30 | $3.5B | $450.7M | $142.0M | $308.7M | 8.8% |
| 2022-12-31 | $3.1B | $384.5M | $130.7M | $253.8M | 8.1% |
| 2023-03-31 | $2.8B | $3.4M | $181.4M | -$178.0M | -6.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -245.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 6.5% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$6.2B | 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 weakness
Operating cash flow was substantially lower than the prior quarter, despite revenue being only moderately lower. This drove free cash flow into negative territory even though capital expenditure was higher than the prior quarter.
The sustainability of operating cash flow is a key factor for future free cash flow generation.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was lower than the prior quarter but higher than a year ago. Operating cash flow, while positive, was very low relative to revenue, resulting in a negative free cash flow margin after capital expenditure.
Compared to the prior quarter, revenue, operating cash flow, and free cash flow all declined, and the free cash flow margin turned negative. Versus the same quarter last year, revenue and operating cash flow improved, capital expenditure was lower, and free cash flow was less negative.
Monitor the level of operating cash flow, as its sharp decline from the prior quarter was the primary factor behind the negative free cash flow.