Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Operating cash flow turned negative, driving free cash flow deeply negative despite flat revenue. Capital expenditure increased, further widening the free cash flow deficit compared to both the prior quarter and the year-ago period.
- Revenue remained unchanged from the prior quarter, but operating cash flow shifted from positive to negative, resulting in a negative free cash flow margin. Capital expenditure rose compared to both the prior quarter and the year-ago quarter, contributing to the deterioration in cash conversion.
- Compared to the prior quarter, operating cash flow and free cash flow both weakened sharply, with free cash flow margin turning from slightly positive to negative. Relative to the same quarter one year ago, revenue was higher, yet operating cash flow and free cash flow were lower, and the free cash flow margin worsened.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$847.3M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$177.1M
Free cash flow in the selected fiscal quarter.
Operating cash flow
-$70.8M
Cash generated by operations before capital spending.
CapEx
$106.3M
Capital spending and related asset purchases.
FCF margin
-7.1%
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 |
|---|---|---|---|---|---|
| 2023-01-28 | $3.2B | $908.5M | $108.2M | $800.3M | 24.8% |
| 2023-04-29 | $2.6B | $304.9M | $109.8M | $195.1M | 7.4% |
| 2023-07-29 | $2.5B | $123.9M | $95.0M | $28.9M | 1.1% |
| 2023-10-28 | $2.5B | -$70.8M | $106.3M | -$177.1M | -7.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -71.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 4.3% | 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.
Negative operating cash flow
Operating cash flow turned deeply negative this quarter, a significant decline from both the prior quarter and the year-ago period. This was the primary observable factor behind the negative free cash flow.
The negative operating cash flow, combined with higher capital expenditure, caused free cash flow to be more negative than the year-ago quarter despite higher revenue.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue remained unchanged from the prior quarter, but operating cash flow shifted from positive to negative, resulting in a negative free cash flow margin. Capital expenditure rose compared to both the prior quarter and the year-ago quarter, contributing to the deterioration in cash conversion.
Compared to the prior quarter, operating cash flow and free cash flow both weakened sharply, with free cash flow margin turning from slightly positive to negative. Relative to the same quarter one year ago, revenue was higher, yet operating cash flow and free cash flow were lower, and the free cash flow margin worsened.
Monitor operating cash flow trends in the next quarter given the significant swing from positive to negative.