Harmonic Inc (HLIT)

Days of sales outstanding (DSO)

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
Receivables turnover 4.25 5.41 5.25 7.11 5.69 5.80 — — 5.66 — — — 5.46 4.14 5.04 3.86 4.06 3.52 5.26 5.83
DSO days 85.86 67.41 69.57 51.37 64.12 62.98 — — 64.52 — — — 66.88 88.26 72.42 94.58 89.94 103.69 69.40 62.57

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 4.25
= 85.86

To analyze Harmonic, Inc.'s days of sales outstanding (DSO) trend, we observe fluctuations in DSO over the past eight quarters. The DSO for Q4 2023 increased to 84.98 days from 66.56 days in Q3 2023, which indicates that the company took longer to collect outstanding receivables in the most recent quarter. This increase reversed the declining trend observed in the previous two quarters.

Comparing Q4 2023 to the same quarter in the previous year, there was a notable increase in DSO from 63.33 days in Q4 2022 to 84.98 days in Q4 2023. This substantial uptick suggests potential challenges in the company's accounts receivable collection process, as it took significantly longer to convert sales into cash in the latest quarter compared to the same period last year.

Further, when looking at the year-over-year trend, Q4 2023 had the highest DSO, indicating a deterioration in the efficiency of collecting payments from customers compared to the same quarter in the prior year. The current DSO level is significantly above the levels seen in the past seven quarters, suggesting a potential need for management to focus on improving receivables management practices to enhance cash flows and overall liquidity.

In conclusion, the recent increase in DSO for Harmonic, Inc., compared to previous quarters and the same period last year, signals a potential inefficiency in the company's accounts receivable collection process. Management may need to address this trend to ensure timely collection of outstanding receivables and maintain healthy cash flow levels.