Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned negative this quarter, compared to positive amounts in both the prior quarter and the same quarter a year earlier. The company’s filing indicates that it believes its liquidity and capital resources will be sufficient to operate its business.
- Operating cash flow declined relative to revenue, while capital expenditure also decreased but not enough to prevent a negative free cash flow margin. The cash conversion weakened as a result.
- Compared to the prior quarter, revenue was slightly higher but operating cash flow was substantially lower, causing free cash flow and margin to worsen. Relative to the same quarter one year ago, both revenue and operating cash flow were lower, and free cash flow moved from positive to negative.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$187.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$52.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$323.0M
Cash generated by operations before capital spending.
CapEx
$375.0M
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 | $13.3B | $762.0M | $589.0M | $173.0M | 1.3% |
| 2023-04-01 | $13.1B | $7.0M | $508.0M | -$501.0M | -3.8% |
| 2023-07-01 | $13.1B | $660.0M | $467.0M | $193.0M | 1.5% |
| 2023-09-30 | $13.3B | $323.0M | $375.0M | -$52.0M | -0.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 11.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.8% | 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.
Decline in Operating Cash Flow
Operating cash flow decreased significantly from both the prior quarter and the year-ago period, while revenue remained relatively stable. This decline was the primary factor behind the negative free cash flow.
The negative free cash flow means the company’s internal cash generation was insufficient to fund its capital investments in the quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow declined relative to revenue, while capital expenditure also decreased but not enough to prevent a negative free cash flow margin. The cash conversion weakened as a result.
Compared to the prior quarter, revenue was slightly higher but operating cash flow was substantially lower, causing free cash flow and margin to worsen. Relative to the same quarter one year ago, both revenue and operating cash flow were lower, and free cash flow moved from positive to negative.
Monitor whether operating cash flow can recover to cover capital expenditure, as the quarter’s negative free cash flow indicates a shortfall.