Kyndryl Holdings Inc (KD)

Cash conversion cycle

		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
Days of inventory on hand (DOH)	days	—	—	—	29.78	29.94	24.73	—	27.85	—	23.35	36.13	—	37.93	27.79	—	—	—	29.39
Days of sales outstanding (DSO)	days	7.01	33.20	34.38	33.70	36.36	36.77	36.08	32.12	32.65	32.66	33.00	38.88	45.25	44.59	33.49	30.52	30.54	27.30
Number of days of payables	days	—	34.68	36.87	38.50	38.97	39.45	32.30	41.59	44.66	42.65	38.47	34.56	34.94	24.86	17.14	17.10	17.11	19.63
Cash conversion cycle	days	7.01	-1.48	-2.49	24.97	27.34	22.06	3.78	18.39	-12.01	13.35	30.66	4.32	48.24	47.51	16.35	13.42	13.43	37.06

March 31, 2025 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 7.01 – —
= 7.01

Based on the data provided for Kyndryl Holdings Inc's cash conversion cycle, we observed fluctuations in the efficiency of the company's cash management over the period analyzed. The cash conversion cycle is a metric that evaluates how efficiently a company is managing its working capital by measuring the time it takes to convert its investments in inventory and accounts receivable into cash.

In December 2020, the cash conversion cycle stood at 37.06 days, indicating that Kyndryl took about 37 days to convert its investments in inventory and accounts receivable into cash. Subsequently, there was a significant improvement in the cash conversion cycle by March 2021, where it decreased to 13.43 days, reflecting a more efficient management of working capital.

Throughout 2021 and early 2022, Kyndryl maintained a relatively low cash conversion cycle, suggesting effective working capital management. However, there was a notable increase in the cycle by December 2021 and March 2022, reaching 47.51 days and 48.24 days, respectively, indicating a potential slowdown in cash conversion efficiency.

The trend reversed in June 2022, with a significant decrease to 4.32 days, which could indicate a more effective management of inventory and accounts receivable. Subsequently, the cycle fluctuated but generally remained at manageable levels until September 2024, where it turned negative, implying a situation where Kyndryl's accounts payable cycle was longer than the sum of the inventory and accounts receivable cycles.

Overall, Kyndryl's cash conversion cycle exhibited fluctuations, with periods of both efficient and less efficient working capital management. It is vital for the company to monitor and improve its cash conversion cycle to ensure optimal liquidity and operational efficiency.