Regeneron Pharmaceuticals Inc. (NASDAQ:REGN)

Inventory Turnover

The inventory turnover ratio exhibited strong volatility over the analyzed periods, peaking around early 2022 and then showing a consistent declining trend thereafter. Initially, the turnover improved significantly from 0.56 to a high of approximately 1.27, indicating more efficient inventory management. However, from mid-2022 onward, it decreased steadily, stabilizing around 0.63-0.65 in the most recent periods, suggesting a slowdown in inventory movement.

Receivables Turnover

The receivables turnover ratio showed fluctuations with a general moderate variability across the timeline. It initially improved sharply to over 3.4 by March 2022, implying quicker collections. This was followed by a decline and a period of relative stability, maintaining values in the range of about 2.2 to 2.5. The pattern indicates some cyclical variations in collection efficiency but no consistent long-term improvement or deterioration.

Payables Turnover

The payables turnover ratio experienced notable volatility, with a sharp rise to a peak of 5.39 early in 2022 followed by a fluctuating downtrend. After reaching this peak, it tended to decrease overall, settling generally between 2.3 and 3.9 in more recent quarters. This suggests a shift towards slower payment of supplier obligations after an initial phase of faster payments.

Working Capital Turnover

The working capital turnover ratio demonstrated a clear declining trend from early 2021 through early 2023, dropping from around 1.35 to below 0.9, indicating less effective use of working capital to support sales. However, from 2023 onwards, a gradual recovery is evident, with the ratio climbing back over 1.0 by mid-2025, which may reflect improving operational utilization of working capital.

Average Inventory Processing Period

The average inventory processing period decreased substantially from 653 days in early 2021 to around 287 days by the first quarter of 2022, representing improved inventory turnover speed. Nevertheless, this trend reversed with a steady increase from mid-2022 onward, ultimately reaching roughly 570 days in recent periods. This extension signals slower inventory clearance and possibly higher inventory holding.

Average Receivable Collection Period

The average receivable collection period shortened significantly in early 2022, dropping from over 200 days to near 107 days, indicating faster customer payment. Since then, it has fluctuated moderately between approximately 140 to 160 days, demonstrating a degree of consistency in credit collections without any dramatic directional changes.

Operating Cycle

The operating cycle initially contracted notably from over 800 days to approximately 394 days by early 2022, reflecting more efficient operational flows. Subsequent to this minimum, it expanded progressively to around 720 days, indicating that the combined duration of inventory holding plus receivables collection was lengthening.

Average Payables Payment Period

The payment period to suppliers showed a declining trend from roughly 160 days to below 70 days by early 2022, suggesting accelerated payments. However, since mid-2022, the period increased again, displaying variability but trending upwards close to or beyond 130 days later on. This signifies a move towards more delayed payments or extended credit terms from suppliers.

Cash Conversion Cycle

The cash conversion cycle improved significantly between early 2021 and early 2022, decreasing from over 650 days to around 320 days, in line with other improved operational metrics. Following this, the cycle lengthened consistently, reaching around 600 days. This suggests a deterioration in the overall efficiency of converting resource inputs into cash inflows, driven primarily by slower inventory turnover and longer collection/payment periods.

The company’s cost of revenues demonstrates noticeable volatility across the examined quarters. Initially, there is a substantial increase from just over $308 million to nearly $983 million by the end of 2021, indicating heightened production or sales costs during this period. This peak is followed by a substantial decline in early 2022, with figures stabilizing around a lower range fluctuating between approximately $297 million and $565 million through to late 2025. Despite some quarterly fluctuations, a general trend of moderate increase in cost of revenues can be observed from the beginning of 2023 towards the end of the forecast period.

Inventory levels exhibit a general upward trend throughout the timeframe. Starting from about $2.16 billion in early 2021, inventories initially show some fluctuation but then increase steadily from mid-2022 onwards, reaching approximately $3.25 billion by late 2025. This consistent rise suggests growing stockpiles or production scale-up, possibly in anticipation of rising demand or as a buffer against supply chain variability.

The inventory turnover ratio reveals a declining trend after peaking around the end of 2021. The ratio increases from 0.56 to 1.25 by December 2021, indicating faster movement of inventory through the company, but subsequently decreases sharply and stabilizes at around 0.64 from mid-2023 onwards. This decline suggests that inventory is being converted to sales at a slower pace in the later periods, which could be due to increased inventory levels outpacing sales growth or a change in sales dynamics.

Cost of revenues

Highly variable with a significant peak in late 2021, followed by reduced and fluctuating levels through to 2025, with a moderate increasing trend in recent quarters.

Inventories

Steady overall increase across periods, indicating expanded stock availability or production scale-up.

Inventory turnover

Increased substantially up to late 2021, but then declined and plateaued at a lower level, suggesting slower inventory movement relative to sales in later periods.

The trends imply that while the company has increased inventory holdings considerably, the efficiency in converting inventory back into revenue has decreased compared to earlier periods. This combination may highlight potential challenges in managing inventory levels or shifts in market demand that could affect operational efficiency and cash flow dynamics in the foreseeable future.

The quarterly financial analysis reveals several notable trends regarding revenues, accounts receivable, and receivables turnover over the period under review.

Revenues

Revenues exhibit considerable volatility across quarters, with values ranging from approximately 2.9 billion to nearly 5.1 billion US dollars in thousands. Initial quarters in 2021 show significant fluctuations, with peaks and troughs alternating. From 2022 onwards, revenues demonstrate a more stable pattern with moderate growth observed in the latter quarters of the period, particularly from mid-2023 through 2024, where revenues gradually increase, peaking near 3.8 billion US dollars in thousands. However, a decline is seen in the first quarter of 2025 before revenues slightly recover by the third quarter.

Accounts Receivable, Net

Accounts receivable balances remain relatively high throughout the period, displaying a generally upward trend. Starting from around 4.2 billion US dollars in thousands at the beginning of 2021, the figures reach over 7 billion mid-year 2021 before dipping somewhat and then progressively increasing again through to late 2024, where the amounts surpass 6 billion. In early 2025, a slight decrease is noted but levels remain elevated compared to early 2021. This pattern suggests a potential accumulation of receivables or slower collections in some periods.

Receivables Turnover Ratio

The receivables turnover ratio, indicative of how efficiently the company collects its receivables, presents a variable trend. It starts relatively low in early 2021, climbing sharply by the first quarter of 2022, suggesting improved collection efficiency. Subsequently, it declines through the middle of 2022 and stabilizes in a range slightly above 2.2 for much of 2023 and 2024, indicating steady but moderate efficiency in receivables management. Toward the end of the observed timeline, the ratio maintains a relatively consistent level, which may signal stabilized collection practices or consistent credit terms.

Overall, while revenues show fluctuating but generally positive momentum, the increase in accounts receivable levels coupled with a moderate and stable receivables turnover ratio may warrant close monitoring to ensure that growth in receivables does not adversely affect liquidity. The data suggests the company manages to maintain consistent collections despite variations in sales volume, although the sizeable receivable balances highlight the importance of ongoing focus on working capital management.

Cost of Revenues

The cost of revenues exhibits significant fluctuations across the periods analyzed. Initially, there was a notable peak in the second quarter of 2021, reaching approximately 693.7 million USD, followed by a sharp decline in the next quarter to 453.2 million USD. Subsequently, it surged again at the end of 2021 to nearly 982.6 million USD. In 2022, the costs decreased in the first half but started to rise steadily towards the end of the year. Throughout 2023 and into 2025, the cost of revenues generally maintains a range between approximately 400 million and 565 million USD, with periodic increases observed especially in the fourth quarters. The variability suggests a cyclical or possibly seasonally influenced pattern, with some quarters demonstrating substantial operational cost spikes.

Accounts Payable

Accounts payable values show a general upward trend over the examined timeframe. Beginning at approximately 543 million USD in the first quarter of 2021, the payable amount decreased slightly in mid-2021, then saw moderate increases through the remainder of 2021 and into early 2022. From mid-2022 onwards, the payable balances exhibit higher volatility but generally increase, notably reaching highs around 789.5 million USD in the fourth quarter of 2024 and again exceeding 900 million USD by the first quarter of 2025. This upward trend may indicate either an expansion in credit purchases or lengthened payment terms to suppliers.

Payables Turnover Ratio

The payables turnover ratio fluctuates considerably during the period under review. Early in 2021, the ratio rose from 2.23 to a peak of 4.32 in the fourth quarter, reflecting more rapid settlement of payables. A higher turnover ratio in the first half of 2022, peaking at 5.39, suggests improved efficiency in paying suppliers at that time. Subsequently, the ratio trends downward, dropping below 3.0 in several quarters throughout 2023 and 2024, indicating slower payment cycles. By late 2024 and into 2025, the ratio decreases further towards approximately 2.3, implying potential lengthening of payable periods or slower payables processing. The volatility within this ratio may reflect changes in working capital management strategies or external economic factors influencing payment practices.

Overall Analysis

Combining these elements, it is evident that the company's cost of revenues and accounts payable both experience significant variability, though accounts payable generally trends upward. The payables turnover ratio's peaks and troughs suggest changes in the speed of supplier payments, possibly tied to operational cash flow management. The contrasts between cost patterns and payables turnover may indicate shifting procurement or financing strategies across the quarters. Close monitoring of these metrics is advisable to understand liquidity impacts and supplier relationships fully.

The analysis of the financial data over multiple quarters reveals several key trends in working capital, revenues, and working capital turnover ratios.

Working Capital

Working capital exhibits a generally increasing trend from March 2021 through December 2024, rising from approximately $6.84 billion to a peak near $15.67 billion. This growth suggests an expansion in current assets relative to current liabilities, potentially indicating improved liquidity or accumulation of short-term assets over time. However, following December 2024, there is a noticeable decline through June 2025, dropping to around $13.56 billion, which could imply increased utilization of working capital or reduction in current assets.

Revenues

Revenues show fluctuations across the reported periods with a notable peak in the second quarter of 2021 at roughly $5.14 billion, followed by a decline and stabilization around the $3 billion to $3.7 billion range in subsequent quarters. Despite some quarters with higher revenue, there is no clear consistent upward or downward long-term trend. The variability suggests seasonality or other factors affecting sales or service income, with some recovery evident in the first three quarters of 2024 and 2025.

Working Capital Turnover

The working capital turnover ratio, representing the efficiency of utilizing working capital to generate revenue, demonstrates a declining trend from early 2021 to late 2023, moving from approximately 1.35 down to a low near 0.82. This decline indicates a reduced efficiency in converting working capital into sales. From 2024 onwards, the ratio gradually improves, rising to about 1.08 by September 2025, suggesting a restoration in operational effectiveness and better management of working capital relative to revenue generation.

In summary, the company’s working capital has generally increased over the observed period before retracting slightly in the latest quarters, while revenues have fluctuated with no clear sustained trend. The working capital turnover ratio’s initial decline followed by recovery implies variability in operational efficiency, emphasizing the changing effectiveness of working capital utilization in relation to revenues. These patterns highlight areas for strategic focus, including improving revenue stability and optimizing working capital management.

The analysis of the quarterly financial ratios reveals notable trends in inventory turnover and the average inventory processing period over the observed timeframe.

Inventory Turnover Ratio

The inventory turnover ratio exhibits a fluctuating pattern with an overall declining trend toward the latter periods. Initially, the ratio increased from 0.56 to 1.27 between the first quarter of 2021 and the first quarter of 2022, indicating an improvement in the frequency at which inventory is sold and replaced. However, following this peak, the ratio steadily declined, reaching approximately 0.63–0.64 in the last observed quarters of 2024 and 2025. This suggests a slowdown in inventory movement in recent quarters, potentially signaling decreased sales efficiency or increased inventory levels.

Average Inventory Processing Period

The average inventory processing period inversely correlates with the inventory turnover ratio, showing a general increase over time. After a significant decrease from 653 days to 287 days between March 2021 and March 2022, there is a notable increase starting mid-2022, with the period extending from 379 days to over 570 days in the quarters of 2024 and 2025. This prolonged processing period indicates that inventory remains on hand for a longer duration prior to sale, reflecting slower turnover.

Overall Interpretation

These trends collectively imply a transition from improving inventory efficiency in the early period to a deceleration in inventory turnover in the more recent timeframe. The elongated inventory processing period and declining turnover ratio may highlight challenges such as weakening demand, changes in inventory management, or supply chain issues. It is advisable to investigate underlying causes impacting inventory movement to address potential inefficiencies or market conditions influencing this performance.

The receivables turnover ratio and the average receivable collection period provide insight into the company’s efficiency in managing its accounts receivable over the observed quarterly periods.

Receivables Turnover Ratio

This ratio exhibits some fluctuations throughout the reported quarters. Initially, it decreased from 2.2 in March 2021 to a low of 1.77 in June 2021, followed by a recovery to 2.66 by the end of 2021. A notable peak is observed in March 2022 at 3.41, indicating improved collection efficiency during this quarter. Afterward, the ratio gradually declined through 2022, stabilizing around the mid-2 range in 2023 and 2024. The latest quarters from March to September 2025 show a consistent level near 2.5, suggesting a relatively stable receivables turnover during this period.

Average Receivable Collection Period

This metric generally moves inversely with the receivables turnover ratio, reflecting the average time in days to collect receivables. It starts relatively high at 166 days in March 2021, increasing to a peak of 206 days by June 2021, indicating slower collections. Subsequently, there is a marked improvement, with the collection period dropping to as low as 107 days in March 2022, corresponding to the peak in turnover ratio. Following this, the period lengthens again through 2022, reaching around 160 days by year-end. During 2023 and into 2024, the days fluctuate moderately between approximately 146 and 161 days. The last few quarters through to September 2025 show a relatively consistent collection period around 144 to 146 days, indicating stabilized collection patterns.

Overall, the data suggests that after some initial variability, the company improved its efficiency in collecting receivables in early 2022, as evidenced by a higher turnover ratio and reduced collection period. This improvement, however, was followed by a gradual return to moderate levels of collection efficiency with more stable trends emerging in 2023 onwards. The consistency in both turnover ratio and collection period in the most recent quarters indicates a steady state in managing receivables without significant deterioration or improvement.

The analysis of the financial metrics over the examined periods reveals notable fluctuations and evolving trends in the company's operational efficiency indicators.

Average Inventory Processing Period

This metric exhibits considerable variability, beginning at a high point of 653 days and generally declining to a low of 287 days by early 2022. Subsequently, a reversal occurs with a progressive increase, reaching figures around 570 days in the most recent periods. The initial downward trend suggests improved inventory turnover, while the later rise may indicate challenges in inventory management or accumulation of stock.

Average Receivable Collection Period

The receivables collection period shows a decreasing trend from 166 days to a low near 107 days by the first quarter of 2022, implying enhanced efficiency in collecting outstanding amounts. However, following this, the period gradually increases and stabilizes around 150-160 days, signifying a moderate lengthening in the collection duration that may affect cash flow dynamics.

Operating Cycle

The operating cycle mirrors the patterns observed in inventory and receivables periods. It starts at approximately 819 days, sharply declines to 394 days by Q1 2022, and then undertakes a sustained upward trajectory, peaking near 734 days before slightly decreasing but remaining elevated above 700 days in recent quarters. This operating cycle behavior indicates initial improvements in overall operational efficiency, followed by a re-extension of the time taken to convert inventory into cash, potentially signaling shifts in operational processes or market conditions.

In summary, the data depict an initial phase of enhanced operational efficiency marked by reduced inventory and receivable durations, culminating in a shortened operating cycle. This phase is followed by a period of regression where these durations expand, potentially pointing to emerging operational challenges or strategic changes. Continuous monitoring and analysis of these cycles will be essential to understand causative factors and implement effective management actions.

Payables Turnover

The payables turnover ratio experienced significant volatility throughout the observed periods. Beginning at 2.23 in the first quarter of 2021, it increased steadily to a peak of 5.39 by the first quarter of 2022. Following this peak, the ratio showed a general declining trend with some fluctuations, ending at 2.30 in the third quarter of 2025. Notably, the ratio saw intermittent rises and falls between mid-2022 and late 2024, indicating varying efficiency in managing payables over time.

Average Payables Payment Period

The average payables payment period, expressed in days, demonstrated an inverse relationship to the payables turnover ratio. Starting at a relatively high 164 days in the first quarter of 2021, the payment period decreased markedly to 68 days by the first quarter of 2022, coinciding with the peak in payables turnover. Afterward, the payment period generally increased with fluctuations, reaching as high as 158 days by the third quarter of 2025. Periods of extension in payment days were evident especially in late 2022 and throughout 2024, suggesting a lengthening of the time taken to settle payables during these intervals.

Overall Trends and Insights

The data reflects a significant shift in payables management between 2021 and 2022, moving from longer payment periods and low turnover to shorter payment periods and high turnover. However, from mid-2022 onward, the trend reversed, with payment periods generally increasing and turnover decreasing, indicating a more extended average payment duration. This pattern may point to changing cash flow strategies or operational adjustments impacting vendor payment practices. The fluctuations in both metrics highlight variability in liquidity management and supplier relations over the span of the analyzed quarters.

Average Inventory Processing Period

The average inventory processing period exhibited notable fluctuations over the observed quarters. Starting at a high of 653 days in early 2021, it decreased steadily to a low of 287 days by the first quarter of 2022. However, following this trough, the period experienced a consistent upward trend, rising to 582 days by the third quarter of 2025. This pattern suggests an initial improvement in inventory turnover efficiency, followed by a gradual lengthening which may indicate slower inventory movement or increased stock levels in later periods.

Average Receivable Collection Period

The average receivable collection period demonstrated variability throughout the timeline, beginning at 166 days and experiencing both declines and increases. It reached its shortest duration of 107 days in the first quarter of 2022, indicating enhanced collection efficiency at that point. Subsequently, the period fluctuated, generally settling between 140 and 160 days in more recent quarters. The overall trend suggests efforts to optimize collection times, albeit with some inconsistency across the time horizon.

Average Payables Payment Period

The average payables payment period showed a decreasing trajectory from 164 days at the start of 2021 to a low of 68 days by the first quarter of 2022, implying quicker payments to suppliers in that timeframe. Post this period, the payment duration extended again, with peaks reaching up to 158 days by the third quarter of 2025. This indicates a strategic shift towards longer payment terms or delayed payments in later quarters, which could reflect cash management considerations or supplier negotiation outcomes.

Cash Conversion Cycle (CCC)

The cash conversion cycle, which integrates inventory processing, receivables, and payables metrics, mirrored the trends observed in individual components. Initially, the CCC declined sharply from 655 days to 326 days by the first quarter of 2022, signifying substantially improved operational efficiency and cash flow management. However, a reversal occurred thereafter, with the CCC steadily increasing and reaching a peak of 640 days by the third quarter of 2024 before slightly declining to 559 days by the third quarter of 2025. The extended CCC in recent periods may suggest challenges in turning over inventory, collecting receivables, or managing payables, potentially impacting liquidity.