SPS Commerce Inc (SPSC)

Days of sales outstanding (DSO)

		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	Jun 30, 2020	Mar 31, 2020
Receivables turnover		12.26	11.01	10.54	10.75	11.46	11.39	10.95	10.86	11.43	11.73	10.35	10.32	11.15	10.35	9.16	9.31	9.31	9.97	8.59	9.44
DSO	days	29.78	33.15	34.64	33.94	31.84	32.06	33.32	33.62	31.92	31.11	35.27	35.35	32.74	35.25	39.85	39.19	39.20	36.60	42.51	38.66

December 31, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 12.26
= 29.78

Days Sales Outstanding (DSO) is a key metric used to evaluate how efficiently a company is able to collect its accounts receivable. A lower DSO indicates faster collection of receivables, which is generally favorable for the company as it helps in improving cash flow and liquidity.

Analyzing the DSO trend of SPS Commerce Inc from March 31, 2020, to December 31, 2024, we can see fluctuations over the years. The DSO fluctuated between a low of 31.11 days on September 30, 2022, and a high of 42.51 days on June 30, 2020.

Overall, there seems to be a general trend of improvement in DSO, indicating that the company is becoming more efficient in its accounts receivable management. The DSO decreased from 38.66 days on March 31, 2020, to 29.78 days on December 31, 2024. This improvement suggests that SPS Commerce Inc has been successful in collecting its receivables more quickly over the years.

It is worth noting that a decreasing DSO trend can also be indicative of tightening credit policies that may affect sales volumes or customer satisfaction. Therefore, it is important for the company to strike a balance between efficient receivables management and maintaining positive customer relationships.

In conclusion, the decreasing trend in DSO for SPS Commerce Inc reflects positive developments in its accounts receivable management, contributing to improved cash flow and overall financial health.