SPS Commerce Inc (SPSC)

Cash conversion cycle

		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
Days of inventory on hand (DOH)	days	—	—	—	—	—	124.46	122.46	122.34	125.80	124.22	—	124.36	123.43	123.46	128.92	132.81	137.11	137.83	137.48	137.40
Days of sales outstanding (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
Number of days of payables	days	14.86	14.49	10.83	23.56	14.88	12.95	13.42	12.13	26.84	20.34	11.35	12.60	23.09	11.14	19.08	17.45	19.57	18.98	16.34	17.79
Cash conversion cycle	days	14.92	18.66	23.80	10.38	16.97	143.56	142.37	143.83	130.88	134.99	23.93	147.11	133.08	147.58	149.69	154.55	156.74	155.45	163.64	158.28

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 29.78 – 14.86
= 14.92

The cash conversion cycle of SPS Commerce Inc has shown fluctuations over the years. At the beginning of the analyzed period in March 2020, the company's cash conversion cycle stood at 158.28 days, indicating the number of days it takes for the company to convert its investments in inventory and other resources into cash flows from sales.

There was a slight increase in the cash conversion cycle by June 2020 to 163.64 days, but it started to decrease gradually in the subsequent quarters. By December 2021, the cash conversion cycle had significantly improved to 133.08 days, reflecting the company's efficiency in managing its working capital and operations.

However, there were some fluctuations in the following quarters, with an increase in the cash conversion cycle in March 2022 to 147.11 days. The company saw a significant improvement by the end of June 2022, with a notably low cash conversion cycle of 23.93 days, suggesting the company's ability to efficiently manage its cash flows and working capital.

Over the course of the next few quarters, the cash conversion cycle remained relatively stable, with minor fluctuations around the 140-day mark. By December 2024, the cash conversion cycle had decreased significantly to 14.92 days, indicating a strong efficiency in the company's cash management processes.

Overall, the trend in the cash conversion cycle of SPS Commerce Inc shows fluctuations but generally demonstrates the company's ability to effectively manage its working capital and optimize its cash flows over the analyzed period.