Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was similar to the prior quarter and higher than the same quarter a year earlier, but operating cash flow turned negative, leading to a negative free cash flow and margin. The company's cash conversion weakened significantly compared to both periods.
- Revenue was substantial, yet operating cash flow was negative, which combined with capital expenditure resulted in a negative free cash flow and a negative free cash flow margin.
- Compared with the prior quarter, revenue was slightly lower, while operating cash flow and free cash flow shifted from positive to negative, and the free cash flow margin weakened. Versus the same quarter a year earlier, revenue was higher, but operating cash flow, free cash flow, and margin were all lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.1B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$930.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
-$631.0M
Cash generated by operations before capital spending.
CapEx
$299.0M
Capital spending and related asset purchases.
FCF margin
-8.7%
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 |
|---|---|---|---|---|---|
| 2022-06-30 | $9.8B | $1.0B | $222.0M | $789.0M | 8.0% |
| 2022-09-30 | $9.8B | $124.0M | $316.0M | -$192.0M | -2.0% |
| 2022-12-31 | $11.0B | $2.8B | $364.0M | $2.5B | 22.5% |
| 2023-03-31 | $10.7B | -$631.0M | $299.0M | -$930.0M | -8.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 87.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.8% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$46.3B | 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 Turned Negative
Operating cash flow shifted from positive in the prior quarter and the year-ago quarter to negative in the current quarter, despite revenue remaining at a similar level to the prior quarter. This reversal directly caused the negative free cash flow and margin.
The negative operating cash flow is the single strongest observable driver of the free cash flow shortfall and requires close monitoring.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was substantial, yet operating cash flow was negative, which combined with capital expenditure resulted in a negative free cash flow and a negative free cash flow margin.
Compared with the prior quarter, revenue was slightly lower, while operating cash flow and free cash flow shifted from positive to negative, and the free cash flow margin weakened. Versus the same quarter a year earlier, revenue was higher, but operating cash flow, free cash flow, and margin were all lower.
Monitor the trajectory of operating cash flow, as its negative turn is the primary factor behind the free cash flow deficit.