Kodiak Gas Services, Inc. (KGS)

Days of sales outstanding (DSO)

		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
Receivables turnover		5.60	4.66	4.44	3.66	4.70	5.42	6.51	6.36	6.11	6.10	7.00
DSO	days	65.23	78.40	82.24	99.73	77.62	67.34	56.06	57.41	59.77	59.79	52.13

June 30, 2025 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 5.60
= 65.23

The analysis of Kodiak Gas Services, Inc.'s Days of Sales Outstanding (DSO) over the specified period reveals notable fluctuations and trends in receivables collection efficiency. As of December 31, 2022, the DSO was approximately 52.13 days, indicating that the company was collecting its receivables roughly every seven weeks. This figure increased modestly during the first quarter of 2023, reaching approximately 59.79 days, and remained relatively stable through June 2023 at around 59.77 days. A slight decline was observed by the end of 2023 to approximately 56.06 days, suggesting some improvement in receivables collection or changes in payment terms.

However, starting in early 2024, a significant upward trend is evident. The DSO increased to 67.34 days in the first quarter of 2024, then sharply rose to 77.62 days by the second quarter, and further escalated to approximately 99.73 days by the third quarter of 2024. This indicates a progressively lengthening period to convert receivables into cash, which could potentially signal deteriorating collection efforts, increased credit risk, or extended payment terms granted to customers. Despite a slight decrease to 82.24 days in the fourth quarter of 2024, the DSO remains notably elevated compared to prior years.

Looking forward, in the first quarter of 2025, the DSO is projected at approximately 78.40 days, followed by a reduction to 65.23 days in the second quarter. This decrease may suggest some recovery in collection efficiency; however, the cumulative data points to an overall trend of increasing receivable collection durations over the period examined.

Such a trajectory in DSO implies a potential decline in liquidity or working capital management efficiency. Prolonged collection periods can strain cash flow, increase the risk of uncollectible accounts, and signal challenges in customer credit management. These observations warrant further investigation into the company's credit policies, customer payment behavior, and broader market or operational factors influencing receivables turnover during these periods.