ZoomInfo Technologies Inc. (GTM)

Cash conversion cycle

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Days of inventory on hand (DOH)	days	—	—	—	—	53.99
Days of sales outstanding (DSO)	days	77.40	80.10	77.85	93.16	94.74
Number of days of payables	days	31.92	70.34	68.97	42.45	29.20
Cash conversion cycle	days	45.48	9.76	8.88	50.70	119.52

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 77.40 – 31.92
= 45.48

The cash conversion cycle (CCC) of ZoomInfo Technologies Inc. has exhibited significant fluctuations over the period from December 31, 2020, to December 31, 2024. As of December 31, 2020, the company's CCC was approximately 119.52 days, indicating that it took roughly four months for the company to convert its investments in inventory and receivables into cash, after accounting for its payable period. This relatively high number suggests a longer collection period or inventory turnover cycle during that year.

By December 31, 2021, the CCC declined substantially to approximately 50.70 days, reflecting improved efficiency in managing receivables, inventory, or payables. This sharp reduction signifies the company's ability to shorten the time it takes to recover cash from its operating cycle, potentially through faster collections or optimized inventory management.

The downward trend continued into December 31, 2022, with the CCC further decreasing to approximately 8.88 days. This near-zero value suggests an extremely efficient working capital management, with the cycle approaching immediate conversion of investments into cash. It indicates that the company likely enhanced its collections process, negotiated favorable credit terms, or streamlined inventory turnover significantly during this period.

However, there was an increase in the CCC by December 31, 2023, to approximately 9.76 days. Despite this slight uptick, the cycle remains very short, maintaining a high level of operational efficiency. The minimal increase could be attributed to seasonal factors, changes in payment terms, or short-term operational adjustments.

In 2024, the CCC rose notably to approximately 45.48 days, reversing some of the earlier gains. This increase suggests that the company's cash conversion efficiency experienced a temporary deterioration, possibly due to extended receivables, longer inventory periods, or altered payment obligations.

Overall, the trend from 2020 to 2022 indicates a rapid improvement in operational efficiency, transitioning from a lengthy cycle to near-immediacy. The subsequent increases in 2023 and 2024 reflect a partial reversal, though the cycle remains considerably shorter than the figure in 2020. These fluctuations in the cash conversion cycle highlight periods of enhanced working capital management alongside brief phases of operational adjustments.