Twilio Inc (TWLO)

Cash conversion cycle

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Days of inventory on hand (DOH)	days	—	—	—	—	—
Days of sales outstanding (DSO)	days	48.19	49.45	52.23	49.86	52.04
Number of days of payables	days	16.40	19.93	22.06	22.30	24.76
Cash conversion cycle	days	31.78	29.52	30.16	27.56	27.28

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 48.19 – 16.40
= 31.78

The cash conversion cycle (CCC) for Twilio Inc. over the observed period indicates slight fluctuations in the company's efficiency in managing its working capital. At the end of December 2020, the CCC stood at approximately 27.28 days, reflecting a relatively efficient cycle of converting investments in inventory and receivables into cash flows from sales. The cycle experienced a marginal increase to 27.56 days by December 2021, suggesting a negligible delay in the collection of receivables or a slight extension in the inventory or payable periods.

Between December 2021 and December 2022, the CCC rose more noticeably to approximately 30.16 days. This uptick may indicate a modest reduction in efficiency, potentially driven by longer receivables collection periods, increased inventory holding times, or changes in payable deferrals. The trend continued with a slight decrease to 29.52 days at the end of December 2023, signaling some improvement or stabilization in working capital management.

By December 2024, the CCC increased again to roughly 31.78 days, marking the longest cycle within this period. This suggests that Twilio Inc. experienced increased delays either in collecting cash from customers, managing inventory, or negotiating payable terms. Overall, the data reflect a moderate and relatively stable cash conversion cycle with minor oscillations around a range of approximately 27 to 32 days over the five-year span.

The slight upward trend observed in the CCC signals an incremental elongation of the company's working capital cycle, which could be a factor to monitor for potential impacts on liquidity and operational efficiency. However, the changes are not drastic, implying that Twilio's cash management practices have remained broadly consistent during this period.