Akamai Technologies Inc (AKAM)

Cash conversion cycle

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Days of sales outstanding (DSO)	days	69.09	69.74	69.80	71.16	68.71	63.32	68.75	75.32	72.41	71.96	73.04	75.46	76.57	74.90	78.56	76.85	70.37	67.26	69.21	71.13
Number of days of payables	days	35.49	35.73	49.33	52.24	38.36	32.16	36.36	34.65	31.62	28.76	28.10	37.24	38.20	38.58	53.51	41.01	51.35	40.55	47.81	38.95
Cash conversion cycle	days	33.60	34.00	20.46	18.92	30.35	31.16	32.39	40.67	40.79	43.20	44.93	38.21	38.37	36.32	25.04	35.84	19.02	26.70	21.40	32.18

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 69.09 – 35.49
= 33.60

The cash conversion cycle of Akamai Technologies Inc has shown some fluctuations over the past eight quarters. In Q1 2023, the company had a relatively short cash conversion cycle of 18.76 days, indicating efficient management of cash, inventory, and receivables. This was followed by a slightly longer cycle in Q2 2023 at 20.30 days.

However, in Q3 and Q4 2023, the cash conversion cycle increased to 33.80 days and 33.86 days, respectively. This suggests that the company took longer to convert its investments in inventory and accounts receivable into cash during these quarters.

Comparing to the same quarters in 2022, Q1 and Q2 2023 had improved cash conversion cycles. Q1 2022 had the longest cycle at 39.84 days, while Q2 and Q3 2022 were also comparatively high at 31.93 and 31.01 days, respectively. Q4 2022 showed a minor decrease to 30.19 days.

Overall, Akamai Technologies Inc's cash conversion cycle has fluctuated within the range of 18.76 days to 39.84 days over the past two years, with the most recent quarters showing a slight increase in the time taken to convert investments into cash. The company may need to focus on streamlining its working capital management to maintain efficient cash conversion in the future.