Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Operating cash flow improved while revenue declined, but a substantial increase in capital expenditure drove free cash flow negative. Compared to the same quarter last year, the free cash flow deficit narrowed, yet sequentially the company moved from positive to negative free cash flow.
- The company converted a lower revenue base into higher operating cash flow, reflecting improved cash conversion, but the large capital expenditure reversed the effect on free cash flow.
- Revenue was lower than both the prior quarter and the year-ago quarter. Operating cash flow was higher than both periods. Capital expenditure was notably higher than the prior quarter and slightly higher than the year-ago quarter, resulting in free cash flow that was negative versus the prior quarter's positive figure but less negative than a year ago.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.6B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$655.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.8B
Cash generated by operations before capital spending.
CapEx
$2.5B
Capital spending and related asset purchases.
FCF margin
-21.7%
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 |
|---|---|---|---|---|---|
| 2023-03-31 | $3.1B | $1.5B | $545.0M | $969.0M | 31.1% |
| 2023-06-30 | $2.8B | $1.4B | $610.0M | $767.0M | 27.4% |
| 2023-09-30 | $3.1B | $1.2B | $690.0M | $544.0M | 17.8% |
| 2023-12-31 | $3.0B | $1.8B | $2.5B | -$655.0M | -21.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -57.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 81.7% | 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.
Capital Expenditure Increase
Capital expenditure rose significantly from the previous quarter, far exceeding the increase in operating cash flow.
This elevated spending was the dominant factor behind the negative free cash flow for the quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
The company converted a lower revenue base into higher operating cash flow, reflecting improved cash conversion, but the large capital expenditure reversed the effect on free cash flow.
Revenue was lower than both the prior quarter and the year-ago quarter. Operating cash flow was higher than both periods. Capital expenditure was notably higher than the prior quarter and slightly higher than the year-ago quarter, resulting in free cash flow that was negative versus the prior quarter's positive figure but less negative than a year ago.
Monitor the level of capital expenditure relative to operating cash flow, as it was the primary factor turning free cash flow negative.