Tyler Technologies Inc (TYL)

Cash conversion cycle

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	—	13.46	—	—	—	13.94	14.68	15.51	14.85	14.60	—	—	—	12.33	13.75	—	—	10.72	—	—
Days of sales outstanding (DSO)	days	117.31	120.11	124.66	101.20	115.65	113.52	121.39	105.99	121.19	137.92	169.84	106.40	124.97	117.96	133.19	104.06	125.68	122.18	139.17	113.54
Number of days of payables	days	32.17	29.60	26.64	27.86	24.16	25.51	31.04	31.29	32.11	30.89	37.75	5.00	5.75	4.59	3.56	5.25	6.21	3.96	3.67	2.86
Cash conversion cycle	days	85.14	103.98	98.03	73.34	91.49	101.95	105.02	90.21	103.93	121.63	132.09	101.40	119.21	125.70	143.38	98.81	119.47	128.94	135.50	110.68

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 117.31 – 32.17
= 85.14

The cash conversion cycle of Tyler Technologies, Inc. has exhibited some fluctuations over the past eight quarters. In Q4 2023, the company's cash conversion cycle was 66.34 days, indicating that it took an average of 66.34 days for the company to convert its investments in inventory and other resources into cash flows from sales.

Compared to the previous quarter, Q3 2023, where the cash conversion cycle was 75.00 days, there was an improvement in efficiency in Q4 2023 as it took fewer days to convert investments into cash. This trend continued from Q2 2023, where the cycle was 82.47 days, showing a steady improvement in the efficiency of cash conversion.

However, in Q1 2023, there was a significant decrease in efficiency with a cash conversion cycle of 57.76 days, as compared to Q4 2023. This suggests that it took the company less time to convert investments into cash during Q1 2023. Comparing these fluctuations with the previous year, there were similar fluctuations in the cash conversion cycle, with Q4 2022 showing a cycle of 77.78 days.

Overall, Tyler Technologies, Inc. has shown varying levels of efficiency in converting its investments into cash over the past eight quarters, with the company experiencing improvements in some quarters and declines in others. It is important for the company to continue monitoring and managing its cash conversion cycle effectively to optimize its working capital management.