KLA-Tencor Corporation (KLAC)
Cash conversion cycle
| Jun 30, 2025 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 255.93 | 281.99 | 248.92 | 218.13 | 207.42 |
| Days of sales outstanding (DSO) | days | 67.98 | 74.57 | 67.30 | 79.89 | 77.31 |
| Number of days of payables | days | 36.53 | 33.40 | 32.10 | 45.04 | 45.04 |
| Cash conversion cycle | days | 287.38 | 323.16 | 284.12 | 252.98 | 239.69 |
June 30, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 255.93 + 67.98 – 36.53
= 287.38
The cash conversion cycle (CCC) of KLA-Tencor Corporation has demonstrated a consistent upward trend over the period from June 30, 2021, to June 30, 2025. Specifically, the CCC increased from approximately 239.69 days in 2021 to 252.98 days in 2022, reflecting a modest elongation in the time taken to convert investments in inventory and other resources into cash flows. The trend continued with the cycle extending further to approximately 284.12 days by 2023, indicating a more substantial increase in liquidity tied-up periods.
The upward trajectory persisted through 2024, with the CCC reaching approximately 323.16 days, representing a significant elongation of roughly 40 days compared to the previous year. This suggests a considerable increase in the duration of working capital tying up in the operating cycle, which might be attributable to changes in inventory management, receivables collection, or payables processes, or possibly shifts in supply chain or customer credit terms.
However, there is a subsequent reduction observed in 2025, where the CCC decreased to roughly 287.38 days. Although still higher than the 2021 baseline, this decline indicates a partial improvement or adjustment in the company's operating cycle components, possibly reflecting efforts to optimize receivables, inventory levels, or payables management.
Overall, the data indicates that KLA-Tencor’s cash conversion cycle experienced a cyclical expansion over the three-year span, peaking in mid-2024, followed by a partial normalization in 2025. The increasing cycle duration over the period may highlight challenges in managing working capital efficiently, while the recent reduction suggests strategic or operational improvements aimed at reducing the time cash is tied up in operations.
Peer comparison
Jun 30, 2025