Alpha and Omega Semiconductor Ltd (AOSL)

Payables turnover

Mar 31, 2025 Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Cost of revenue (ttm) US$ in thousands 519,823 504,870 493,009 485,356 482,441 469,710 484,145 491,785 505,578 534,641 523,876 508,996 494,988 480,672 465,799 452,359 429,091 396,963 380,336 362,178
Payables US$ in thousands 51,012 40,816 41,848 45,084 42,513 45,156 52,268 50,775 54,689 65,799 80,101 87,377 69,758 62,175 81,681 80,699 81,858 83,859 87,604 86,181
Payables turnover 10.19 12.37 11.78 10.77 11.35 10.40 9.26 9.69 9.24 8.13 6.54 5.83 7.10 7.73 5.70 5.61 5.24 4.73 4.34 4.20

March 31, 2025 calculation

Payables turnover = Cost of revenue (ttm) ÷ Payables
= $519,823K ÷ $51,012K
= 10.19

The payables turnover ratio for Alpha and Omega Semiconductor Ltd demonstrates a generally upward trend over the analyzed period, indicating an increasing frequency in the company's payment of accounts payable relative to its cost of goods sold.

From June 30, 2020, the ratio was 4.20, reflecting the number of times the company settled its payables within a year. This ratio gradually increased throughout the subsequent quarters, reaching 4.34 by September 30, 2020, and continuing an upward trajectory with notable accelerations. By December 31, 2020, the ratio had risen to 4.73, and it further increased to 5.24 in March 2021.

The trend persisted into 2021 and 2022, with ratios of 5.61, 5.70, and a significant jump to 7.73 by December 31, 2021. This escalation indicates that the company was increasingly paying off its suppliers more frequently or reducing its days payable outstanding (DPO).

Beyond 2021, the ratio maintained an upward movement, reaching 7.10 in March 2022, then accelerating to 8.13 and 9.24 in December 2022 and March 2023, respectively. During this period, the ratio's increase suggests a continued trend towards shorter payment cycles.

From mid-2023 onwards, the ratio fluctuated but remained elevated, with values of 9.69 in June 2023, slightly decreasing to 9.26 in September 2023, then increasing again to 10.40 in December 2023. The trajectory continued upward with 11.35 in March 2024, followed by a slight decline to 10.77 in June 2024, and a further rise to 11.78 in September 2024. By December 2024, the ratio reached 12.37, indicating that the company was settling its payables an average of approximately every 29.5 days (assuming 365 days/year).

In March 2025, the ratio declined to 10.19, suggesting a slight lengthening in the payable period.

Overall, the increase in the payables turnover ratio over this period reflects a trend toward quicker settlements with suppliers, which could be indicative of improving liquidity, stronger negotiating power, or strategic changes in payment policies. The recent high levels imply that Alpha and Omega Semiconductor Ltd is paying its suppliers more frequently relative to its cost basis, possibly to strengthen supplier relationships or due to improved cash flow management.