Lumentum Holdings Inc (LITE)
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 | 144.79 | 131.28 | 124.49 | 98.79 | 74.70 |
| Days of sales outstanding (DSO) | days | 55.47 | 52.28 | 50.84 | 55.84 | 44.57 |
| Number of days of payables | days | 69.36 | 41.62 | 51.61 | 61.90 | 44.46 |
| Cash conversion cycle | days | 130.90 | 141.94 | 123.71 | 92.73 | 74.80 |
June 30, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 144.79 + 55.47 – 69.36
= 130.90
The cash conversion cycle (CCC) of Lumentum Holdings Inc. has exhibited an increasing trend over the period from June 30, 2021, to June 30, 2025. Specifically, the CCC was 74.80 days on June 30, 2021, which then extended to 92.73 days by June 30, 2022. This upward movement continued through subsequent periods, reaching 123.71 days on June 30, 2023, and further increasing to 141.94 days by June 30, 2024. Although a slight reduction is observed thereafter, the CCC stands at 130.90 days as of June 30, 2025.
This trend indicates that the company has been experiencing progressively longer cycles to convert investments in inventory and receivables into cash, relative to its payables. The increasing duration suggests potential challenges in managing the balance between inventories, receivables collection, and payable periods. The peak observed in June 2024 demonstrates the highest net lengthening of the cycle, which may be attributable to factors such as extended inventory holding periods, slower collections, or shifts in vendor payables.
Overall, the sustained growth in the cash conversion cycle over these years signals a lengthening of the company's operating cash flow timeline, which could impact liquidity management and working capital efficiency. A careful analysis of the components, including days sales outstanding (DSO), days inventory outstanding (DIO), and days payable outstanding (DPO), would be necessary to determine the specific drivers behind this trend and assess its implications for future operational and financial strategies.
Peer comparison
Jun 30, 2025