Microsoft Corporation (MSFT)

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	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020
Receivables turnover		4.03	5.22	5.43	5.76	4.31	5.37	5.31	5.91	4.35	5.55	5.70	6.49	4.48	5.90	5.52	6.44	4.42	6.08	5.61	6.44
DSO	days	90.57	69.89	67.18	63.39	84.76	67.93	68.69	61.78	83.86	65.79	64.08	56.22	81.48	61.82	66.17	56.64	82.61	60.06	65.04	56.69

June 30, 2025 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 4.03
= 90.57

The analysis of Microsoft's Days of Sales Outstanding (DSO) over the provided period reveals notable fluctuations and underlying trends. Initially, at the end of September 2020, the DSO was approximately 56.69 days, indicating the average time it took for the company to collect receivables. During the subsequent quarter-ending December 2020, the DSO increased to approximately 65.04 days, reflecting a lengthening in the collection period.

This upward trend persisted into the first quarter of 2021, with a DSO of roughly 60.06 days, but an overall increase was observed by the end of June 2021, when the DSO rose sharply to 82.61 days. The mid-2021 figure indicates a significant extension in the receivables collection period, suggesting either increased credit extension, delays in payments, or changes in customer payment behavior.

In the latter half of 2021, the DSO decreased back to around 56.64 days at the September quarter-end, aligning closer to early 2020 levels, but again edged upward at year-end to 66.17 days. The trend continued into 2022, with the first quarter DSO at approximately 61.82 days, followed by an increase to 81.48 days in the June quarter. This pattern of fluctuation persisted, with the DSO decreasing again to approximately 56.22 days by September 2022, then increasing to 64.08 days at year-end.

Throughout 2023, the DSO exhibited continued variability: it averaged around the low 60s early in the year (65.79 days in March), then surged to about 83.86 days in June, before settling to approximately 61.78 days by September. The subsequent quarters show a continued upward trend, with the DSO reaching about 68.69 days at the end of 2023, and further increasing to roughly 69.89 days in the first quarter of 2024.

The most recent data indicates a pronounced upward trajectory, with the DSO climbing to 84.76 days in June 2024, the highest within the period analyzed. In the latest quarter end, September 2024, it decreased somewhat to 63.39 days, and fluctuated slightly at the end of 2024 and into 2025, with the DSO around 67.18 days at December 2024 and rising again to 69.89 days by March 2025, culminating in a notable peak of approximately 90.57 days in June 2025.

Overall, the DSO volatility reflects periods of extended collection times that surpass the typical industry standards, which generally range between 30 to 50 days. The elevated and fluctuating DSO could indicate varying credit policies, customer payment behaviors, or operational adjustments. Persistent increases in DSO, particularly those approaching or exceeding 90 days, may signal potential liquidity concerns or changes in credit risk management. Regular monitoring and analysis of underlying causes are essential for maintaining effective receivables management and assessing cash flow implications.