Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned negative in the current quarter, driven by a significant outflow from operating activities despite higher revenue. Both operating cash flow and free cash flow margin weakened compared to the prior quarter and the same quarter last year.
- Revenue increased but operating cash flow fell sharply to a negative figure, resulting in negative free cash flow and a negative free cash flow margin. Capital expenditure was modestly higher than the prior quarter but lower than the year-ago quarter.
- Compared to the preceding quarter, operating cash flow and free cash flow both reversed from positive to negative, and free cash flow margin weakened markedly. Versus the same quarter one year earlier, all cash flow metrics were lower, with operating cash flow and free cash flow turning negative from positive levels.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$290.6M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$23.5M
Free cash flow in the selected fiscal quarter.
Operating cash flow
-$19.2M
Cash generated by operations before capital spending.
CapEx
$4.3M
Capital spending and related asset purchases.
FCF margin
-4.7%
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 | $473.2M | $129.4M | $4.7M | $124.7M | 26.4% |
| 2022-12-31 | $452.2M | $121.9M | $5.1M | $116.8M | 25.8% |
| 2023-03-31 | $471.9M | $74.7M | $2.0M | $72.7M | 15.4% |
| 2023-06-30 | $504.3M | -$19.2M | $4.3M | -$23.5M | -4.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -47.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.9% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$750.3M | 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 volatility
Operating cash flow dropped from a positive figure in both comparison periods to a negative amount, which was the primary factor behind the negative free cash flow. This occurred even though revenue was higher quarter-over-quarter and year-over-year.
The conversion of revenue into cash weakened significantly, causing free cash flow to turn negative despite higher revenue.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased but operating cash flow fell sharply to a negative figure, resulting in negative free cash flow and a negative free cash flow margin. Capital expenditure was modestly higher than the prior quarter but lower than the year-ago quarter.
Compared to the preceding quarter, operating cash flow and free cash flow both reversed from positive to negative, and free cash flow margin weakened markedly. Versus the same quarter one year earlier, all cash flow metrics were lower, with operating cash flow and free cash flow turning negative from positive levels.
Monitor the trajectory of operating cash flow, as the negative swing from the prior quarter represents a material shift in cash conversion.