Guidewire Software Inc (GWRE)
Cash conversion cycle
| Jul 31, 2025 | Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | 16.37 | 9.07 | — | 25.14 |
| Days of sales outstanding (DSO) | days | 82.44 | 90.15 | 103.41 | 102.16 | 94.74 |
| Number of days of payables | days | 23.34 | 13.98 | 28.27 | 33.90 | 28.72 |
| Cash conversion cycle | days | 59.11 | 92.54 | 84.21 | 68.26 | 91.16 |
July 31, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 82.44 – 23.34
= 59.11
The cash conversion cycle (CCC) of Guidewire Software Inc., as reflected in the data from July 31, 2021, to July 31, 2025, demonstrates notable fluctuations over this period. As of July 31, 2021, the CCC stood at approximately 91.16 days, indicating that the company took roughly three months to convert its investments in inventory and receivables into cash, considering the length of its payable period.
By July 31, 2022, this cycle decreased significantly to approximately 68.26 days, suggesting an improvement in working capital efficiency. Such a reduction could be attributed to faster collections, shorter inventory turnover, or extended payment periods to suppliers, or a combination of these factors. This improvement indicates a more streamlined cash flow process, potentially enhancing liquidity and operational efficiency.
However, the subsequent year, by July 31, 2023, the CCC increased to approximately 84.21 days, reflecting a reversal of the previous trend toward shorter cycles. This rise may be due to slower receivables collection, increased inventory holding periods, or more conservative payment terms, leading to a longer period to realize cash from operations.
Further data shows that by July 31, 2024, the CCC extended further to approximately 92.54 days, the highest within the analyzed period. This escalation indicates potential tightening of operational efficiencies or changes in payment strategies, possibly posing challenges to cash flow management.
Conversely, by July 31, 2025, the cycle contracted substantially to approximately 59.11 days. This significant reduction points to a notable enhancement in cash flow processes, potentially driven by improved receivables management, inventory control, or renegotiated supplier terms, culminating in a shorter period to convert operating cycles into cash.
Overall, the trend demonstrates a period of improvement from 2021 through 2022, followed by a subsequent fluctuation, culminating in marked efficiency gains by 2025. These movements in the cash conversion cycle reflect ongoing variations in operational efficiency, working capital management, and strategic financial practices over the analyzed period.