Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Cash conversion improved sequentially but remained negative, while year-over-year performance weakened. The quarter’s free cash flow deficit narrowed compared with the prior quarter, but turned from a surplus a year ago.
- Revenue was lower than the prior quarter but higher than a year ago. Operating cash flow turned positive versus the previous quarter’s negative figure, though it declined sharply from the year-ago level. Capital expenditure decreased compared with both periods. As a result, free cash flow remained negative, with a margin that improved from the prior quarter but was lower than the year-ago margin.
- Compared with the immediately preceding quarter, the free cash flow deficit narrowed and the margin improved, driven by a positive swing in operating cash flow and lower capital expenditure. Versus the same quarter one year earlier, free cash flow shifted from a surplus to a deficit and the margin weakened, as operating cash flow was substantially lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$287.9M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$26.5M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$5.0M
Cash generated by operations before capital spending.
CapEx
$31.5M
Capital spending and related asset purchases.
FCF margin
-2.1%
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 |
|---|---|---|---|---|---|
| 2022-09-30 | $1.4B | $54.6M | $56.9M | -$2.3M | -0.2% |
| 2022-12-31 | $1.4B | -$119.6M | $38.3M | -$157.9M | -11.2% |
| 2023-03-31 | $1.4B | -$34.7M | $66.5M | -$101.2M | -7.0% |
| 2023-06-30 | $1.3B | $5.0M | $31.5M | -$26.5M | -2.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 12.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.5% | 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 recovery
Operating cash flow improved from a negative figure in the prior quarter to a positive, albeit small, amount. However, it remained well below the level achieved a year ago.
The positive swing in operating cash flow helped reduce the free cash flow deficit, but the overall cash generation remains constrained.
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 turned positive versus the previous quarter’s negative figure, though it declined sharply from the year-ago level. Capital expenditure decreased compared with both periods. As a result, free cash flow remained negative, with a margin that improved from the prior quarter but was lower than the year-ago margin.
Compared with the immediately preceding quarter, the free cash flow deficit narrowed and the margin improved, driven by a positive swing in operating cash flow and lower capital expenditure. Versus the same quarter one year earlier, free cash flow shifted from a surplus to a deficit and the margin weakened, as operating cash flow was substantially lower.
Monitor the level of capital expenditure, which declined notably from both the prior quarter and the year-ago quarter.