What it measures
Free cash flow (FCF) is the cash a business has left after covering the capital expenditure it needs to run and maintain itself. That cash can go to shareholders, to paying down debt, or back into the business.
In one line: FCF = net cash from operating activities - capital expenditure. It is in currency. Some companies use a looser proxy, EBITDA minus capex, which usually looks better.
How to read it
Positive FCF means the business funds its own investment. Negative FCF means it relies on cash reserves or new funding. One quarter says little, because capex arrives in lumps. Watch the direction over several quarters and whether it follows a spending peak.
Where it misleads
Many companies publish their own "Adjusted" version with a definition that can change. Grab, for example, changed the definition of its Adjusted Free Cash Flow more than once, so older figures were reported under an old definition. A company-defined figure and the plain operating cash flow minus capex can tell different stories. Always compute the plain version from the cash flow statement too.
Worked example
GoTo's Q3 2025 post derives a plain FCF from the cash flow statement, because GoTo does not disclose one for the quarter. Nine-month figures: net cash used in operating activities was -Rp160.8 billion and capital expenditure was -Rp1,135.9 billion. The first-half 2025 figures were -Rp612.1 billion and -Rp870.0 billion.
- Q3 operating cash flow: -160.8 - (-612.1) = +451.3, which the post states as approximately +Rp451 billion.
- Q3 capex: -1,135.9 - (-870.0) = -265.9, which the post states as approximately -Rp266 billion.
- Q3 FCF: 451.3 - 265.9 = 185.4, which the post states as roughly +Rp185 billion.
The post compares this with roughly -Rp467 billion in Q3 2024.
Where to find it
Cash flow statement. Capex is in the investing section.
See also: Capex, Cash Flow Statement, Adjusted EBITDA.