Palantir Technologies Inc. Class A Common Stock (PLTR)

Cash conversion cycle

		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
Days of inventory on hand (DOH)	days	—	—	—	—	—	—	10.34	14.51	—	—	—	39.39	46.78	34.85
Days of sales outstanding (DSO)	days	92.15	97.08	76.15	59.84	73.90	67.07	46.71	49.48	68.47	55.62	56.86	45.20	44.48	66.77
Number of days of payables	days	19.72	53.28	29.58	10.26	8.10	3.95	3.92	40.01	55.44	55.88	27.86	80.56	19.99	29.32
Cash conversion cycle	days	72.43	43.80	46.57	49.58	65.80	63.12	53.13	23.98	13.03	-0.26	29.00	4.03	71.27	72.31

September 30, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 92.15 – 19.72
= 72.43

The cash conversion cycle of Palantir Technologies Inc. Class A Common Stock has fluctuated over the past 16 quarters, indicating varying efficiency in converting its resources into cash. For the most recent quarter, ending September 30, 2024, the company's cash conversion cycle was 72.43 days, reflecting an increase from the previous quarter.

A longer cash conversion cycle suggests that the company is taking more time to convert its investments in inventory and accounts receivable into cash. This could be due to slower sales turnover, delayed collections from customers, or extended inventory holding periods.

In contrast, negative cash conversion cycle values, such as the -0.26 days reported in the second quarter of 2022, indicate that the company was able to convert its resources into cash more rapidly than the time it took to pay its suppliers. This could be a sign of efficient working capital management.

It is essential for investors and analysts to monitor changes in the cash conversion cycle over time to assess the company's liquidity position, operational efficiency, and potential risks associated with working capital management. Fluctuations in the cash conversion cycle can provide valuable insights into the company's financial health and ability to generate cash flows.