Kodiak Gas Services, Inc. (KGS)

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
Days of inventory on hand (DOH)	days	47.77	46.28	52.49	64.51	76.66	66.35	70.04	79.36	96.56	98.74	98.51
Days of sales outstanding (DSO)	days	65.23	78.40	82.24	99.73	77.62	67.34	56.06	57.41	59.77	59.79	52.13
Number of days of payables	days	23.83	33.77	29.24	46.90	42.02	48.60	45.79	54.89	44.12	46.40	51.87
Cash conversion cycle	days	89.17	90.91	105.49	117.34	112.25	85.09	80.31	81.88	112.21	112.12	98.77

June 30, 2025 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 47.77 + 65.23 – 23.83
= 89.17

The cash conversion cycle (CCC) of Kodiak Gas Services, Inc. demonstrates notable fluctuations over the analyzed period from December 2022 through June 2025. Starting at approximately 98.77 days at the end of 2022, the CCC increased through March and June 2023, reaching around 112.12 and 112.21 days respectively. This indicates a longer period between outlay of cash for inventory and receivables collection, suggesting potential challenges in managing working capital during this interval.

Subsequently, the CCC experienced a significant decrease by the end of September 2023 to approximately 81.88 days, implying an improvement in the efficiency of cash cycle management—likely through faster receivables collection, quicker inventory turnover, or extended payment terms with suppliers. This reduction persisted into the end of 2023, with the CCC stabilizing around 80.31 days at December 2023.

However, the cycle began to elongate again, reaching approximately 85.09 days by March 2024 and sharply increasing to about 112.25 days by June 2024. This reversal indicates a slowdown in cash flow efficiency, potentially due to extended receivables, slower inventory turnover, or shorter payment cycles to suppliers.

The upward trend continued through September 2024, with the CCC peaking at roughly 117.34 days, reflecting more extended cash conversion delays. By the end of the year, the cycle slightly decreased to approximately 105.49 days. The further projections indicate a decrease at March 2025 to about 90.91 days, followed by a modest decline to 89.17 days by June 2025, suggesting a partial recovery in working capital management.

Overall, the temporal pattern of Kodiak Gas Services, Inc.'s cash conversion cycle exhibits periods of both improvement and deterioration. The initial reduction in late 2023 signals enhanced efficiency, whereas subsequent elongation through mid-2024 indicates increased working capital tied up in operational processes. The partial reduction projected into mid-2025 suggests ongoing efforts to optimize operational cash flow, though the cycle remains relatively volatile within this period.