Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
For the fiscal third quarter ended March 29, 2024, revenue turned negative while free cash flow remained negative but improved from the prior quarter and the prior year. Operating cash flow turned positive, offering a relative bright spot despite capital expenditure reducing the cash position.
- Revenue was negative, yet operating cash flow was positive, indicating that cash conversion from the revenue base strengthened compared to the negative operating cash flow in both the prior quarter and the year-ago quarter. Capital expenditure was higher than operating cash flow, leading to a negative free cash flow margin that nevertheless improved from the negative margins in the comparison periods.
- Compared to the immediately preceding quarter, revenue weakened substantially, while operating cash flow improved from negative to positive. Free cash flow also improved, and the free cash flow margin moved higher from a negative level. Relative to the same quarter one year earlier, revenue was lower, operating cash flow was significantly improved from a large negative to positive, and free cash flow and its margin both improved considerably.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$1.2B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$39.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$58.0M
Cash generated by operations before capital spending.
CapEx
$97.0M
Capital spending and related asset purchases.
FCF margin
2.7%
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 |
|---|---|---|---|---|---|
| 2023-06-30 | -$3.4B | -$68.0M | $119.0M | -$187.0M | 5.5% |
| 2023-09-29 | $1.2B | -$626.0M | $124.0M | -$750.0M | -62.8% |
| 2023-12-29 | $4.6B | -$92.0M | $150.0M | -$242.0M | -5.3% |
| 2024-03-29 | -$1.5B | $58.0M | $97.0M | -$39.0M | 2.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -28.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | -6.6% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$5.9B | 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 turns positive
Operating cash flow shifted from a large outflow in both the prior quarter and the year-ago quarter to an inflow this quarter, despite revenue being lower. This improvement drove free cash flow higher on a sequential and year-over-year basis, even as capital expenditure remained substantial.
The positive operating cash flow helped narrow the free cash flow deficit and improved the cash conversion profile compared with recent quarters.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was negative, yet operating cash flow was positive, indicating that cash conversion from the revenue base strengthened compared to the negative operating cash flow in both the prior quarter and the year-ago quarter. Capital expenditure was higher than operating cash flow, leading to a negative free cash flow margin that nevertheless improved from the negative margins in the comparison periods.
Compared to the immediately preceding quarter, revenue weakened substantially, while operating cash flow improved from negative to positive. Free cash flow also improved, and the free cash flow margin moved higher from a negative level. Relative to the same quarter one year earlier, revenue was lower, operating cash flow was significantly improved from a large negative to positive, and free cash flow and its margin both improved considerably.
Monitor whether operating cash flow remains positive when revenue is negative, as this dynamic was a key divergence from past patterns.