Lam Research Corp (LRCX)

Days of sales outstanding (DSO)

		Jun 30, 2025	Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021
Receivables turnover		5.46	5.92	6.17	3.99	4.83
DSO	days	66.88	61.69	59.13	91.40	75.53

June 30, 2025 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 5.46
= 66.88

The analysis of Lam Research Corp's Days of Sales Outstanding (DSO) over the specified periods reveals notable fluctuations in the company's receivables collection efficiency. As of June 30, 2021, the DSO stood at approximately 75.53 days, indicating that, on average, it took the company about 75.5 days to collect receivables after a sale. This figure increased significantly to approximately 91.40 days by June 30, 2022, suggesting a lengthening in the receivables collection period, which could imply either extended credit terms granted to customers or potential delays in collections.

However, from June 30, 2022, the DSO experienced a sharp decrease, declining to approximately 59.13 days by June 30, 2023. This reduction indicates an improved receivables collection process, with Lam Research being able to convert its sales into cash more rapidly within that year. The subsequent period from June 30, 2023, to June 30, 2024, shows a slight increase in DSO to approximately 61.69 days, implying a modest elongation of the collection cycle. Continuing into June 30, 2025, the DSO rises further to about 66.88 days, approaching levels similar to those observed in 2021.

Overall, the DSO trend demonstrates a significant peak in mid-2022, followed by an improvement in collection efficiency in the subsequent year, and then a gradual lengthening again towards mid-2025. These movements could reflect changes in credit policy, customer payment behaviors, or shifts in order mix or credit risk. While the DSO in 2023 shows a favorable reduction compared to 2022, the increasing trajectory thereafter warrants ongoing monitoring to assess the company's receivables management and potential impacts on cash flow liquidity.