H2O America (HTO)

Cash conversion cycle

		Jun 30, 2025	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
Days of inventory on hand (DOH)	days	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Days of sales outstanding (DSO)	days	70.52	64.63	69.51	81.77	69.51	59.96	68.76	74.59	64.81	58.78	64.95	77.29	69.68	62.70	66.66	75.51	66.67	60.23	66.66	74.91
Number of days of payables	days	51.58	51.40	63.51	51.93	46.54	43.69	59.71	47.93	50.17	35.97	40.97	41.87	37.71	40.09	43.48	53.28	57.27	37.74	50.34	50.37
Cash conversion cycle	days	18.94	13.23	6.01	29.84	22.97	16.26	9.05	26.66	14.64	22.81	23.98	35.42	31.97	22.62	23.18	22.23	9.41	22.49	16.31	24.55

June 30, 2025 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 70.52 – 51.58
= 18.94

The analysis of H2O America's cash conversion cycle (CCC) over the period provided reveals notable fluctuations and a general trend towards increased cycle duration followed by a sharp reduction.

Initially, the CCC averaged approximately 24.55 days as of September 30, 2020. During the subsequent quarters, there was a gradual decline, reaching a low of about 9.41 days by June 30, 2021, indicating an improvement in working capital management—specifically, faster collection of receivables and/or efficient inventory management.

However, starting from September 30, 2021, the CCC increased again, peaking at around 35.42 days on September 30, 2022. This suggests a slowdown in cash conversion efficiency, possibly due to longer receivables collection periods, increased inventory holding, or extended payables deferral.

Subsequently, the CCC experienced a declining trend, with notable reductions to approximately 23.98 days by December 31, 2022, and further down to roughly 14.64 days by June 30, 2023. This indicates a period of improved liquidity management and cash cycle efficiency.

In the final analysis period presented, the CCC fluctuated again, reaching about 26.66 days on September 30, 2023, then plummeting to a low of approximately 6.01 days at December 31, 2024. The subsequent quarters saw some increase but remained relatively low, with a value of around 13.23 days at March 31, 2025, and 18.94 days at June 30, 2025.

Overall, the data indicates that H2O America has experienced periods of both speed and delays in converting investments in inventory and receivables into cash, reflecting dynamic working capital management strategies over time. The significant reductions observed at the end of 2024 suggest enhanced operational efficiencies or tighter credit and inventory policies in that period.