What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-11-04 compared with 2022-05-06 · 319 added, 462 removed, 522 unchanged (60% of the section changed)

3 unchanged sentences

(in thousands, except per share amounts)

March 31, June 30,

September 30, June 30,

Current assets:

Cash and cash equivalents $ 238,268 $ 267,397

Accounts receivable, net of allowances of $ 1,776 and $ 2,591 at March 31, 2022 and June 30, 2021, respectively (including accounts receivable from related parties of $ 34,084 and $ 8,678 at March 31, 2022 and June 30, 2021, respectively)

Accounts receivable, net of allowance for credit losses of $ 510 and $ 1,753 at September 30, 2022 and June 30, 2022, respectively (including accounts receivable from related parties of $ 10,249 and $ 8,398 at September 30, 2022 and June 30, 2022, respectively)

736,312 834,513

Inventories 1,736,055 1,545,606

Prepaid expenses and other current assets (including receivables from related parties of $ 29,561 and $ 23,837 at March 31, 2022 and June 30, 2021, respectively)

Prepaid expenses and other current assets (including receivables from related parties of $ 34,551 and $ 24,412 at September 30, 2022 and June 30, 2022, respectively)

169,245 158,799

7 unchanged sentences

Current liabilities:

Accounts payable (including amounts due to related parties of $ 87,266 and $ 70,096 at March 31, 2022 and June 30, 2021, respectively)

Accounts payable (including amounts due to related parties of $ 94,029 and $ 87,355 at September 30, 2022 and June 30, 2022, respectively)

$ 785,025 $ 655,403

Accrued liabilities (including amounts due to related parties of $ 15,315 and $ 18,528 at March 31, 2022 and June 30, 2021, respectively)

Accrued liabilities (including amounts due to related parties of $ 28,261 and $ 18,676 at September 30, 2022 and June 30, 2022, respectively)

213,521 212,419

12 unchanged sentences

Outstanding shares:

51,870 and 50,582 at March 31, 2022 and June 30, 2021, respectively

52,851 and 52,311 at September 30, 2022 and June 30, 2022, respectively

Issued shares:

51,870 and 50,582 at March 31, 2022 and June 30, 2021, respectively

52,851 and 52,311 at September 30, 2022 and June 30, 2022, respectively

497,183 481,741

7 unchanged sentences

See accompanying notes to condensed consolidated financial statements.

SMCI | Q1 2023 Form 10-Q | 1

SUPER MICRO COMPUTER, INC.

2 unchanged sentences

Three Months Ended

March 31, Nine Months Ended

2022 2021 2022 2021

Net sales (including related party sales of $ 47,669 and $ 20,432 in the three months ended March 31, 2022 and 2021, respectively, and $ 120,206 and $ 58,853 in the nine months ended March 31, 2022 and 2021, respectively)

September 30,

Net sales (including related party sales of $ 25,055 and $ 30,922 in the three months ended September 30, 2022 and 2021, respectively)

$ 1,852,130 $ 1,032,730

Cost of sales (including related party purchases of $ 95,479 and $ 57,454 in the three months ended March 31, 2022 and 2021, respectively, and $ 279,893 and $ 167,845 in the nine months ended March 31, 2022 and 2021, respectively)

Cost of sales (including related party purchases of $ 96,536 and $ 87,687 in the three months ended September 30, 2022 and 2021, respectively)

1,504,595 894,591

6 unchanged sentences

Income from operations 220,123 29,128

Other (expense) income, net 4,663 2,017 4,106 ( 1,363 )

Other income, net 8,054 50

Interest expense ( 3,938 ) ( 804 )

Income before income tax provision 224,239 28,374

Income tax benefit (provision) ( 16,192 ) 227 ( 27,116 ) ( 8,541 )

Share of income (loss) from equity investee, net of taxes 255 ( 264 ) 882 ( 409 )

Income tax provision ( 38,934 ) ( 3,325 )

Share of (loss) income from equity investee, net of taxes ( 889 ) 388

Net income $ 184,416 $ 25,437

2 unchanged sentences

Diluted $ 3.35 $ 0.48

Weighted-average shares used in calculation of net income per common share:

Weighted-average shares used in the calculation of net income per common share:

Basic 52,598 50,796

1 unchanged sentence

See accompanying notes to condensed consolidated financial statements.

SMCI | Q1 2023 Form 10-Q | 2

SUPER MICRO COMPUTER, INC.

2 unchanged sentences

Three Months Ended

March 31, Nine Months Ended

2022 2021 2022 2021

September 30,

Net income $ 184,416 $ 25,437

Other comprehensive income (loss), net of tax:

Foreign currency translation gain (loss) 5 ( 34 ) 101 514

Total other comprehensive income (loss) 5 ( 34 ) 101 514

Other comprehensive loss, net of tax:

Foreign currency translation loss ( 397 ) ( 4 )

Total other comprehensive (loss), net of tax ( 397 ) ( 4 )

Total comprehensive income $ 184,019 $ 25,433

See accompanying notes to condensed consolidated financial statements.

SMCI | Q1 2023 Form 10-Q | 3

SUPER MICRO COMPUTER, INC.

1 unchanged sentence

(in thousands, except share amounts)

Three Months Ended March 31, 2022 Common Stock and

Additional Paid-In

Capital Treasury Stock Accumulated

Comprehensive

Income Retained

Earnings Non-controlling Interest Total

Stockholders’

Shares Amount Shares Amount

Balance at December 31, 2021 51,508,616 $ 460,990 — $ — $ 549 $ 725,129 $ 177 $ 1,186,845

Exercise of stock options, net of taxes 251,598 4,363 — — — — — 4,363

Release of common stock shares upon vesting of restricted stock units 161,873 — — — — — — —

Shares withheld for the withholding tax on vesting of restricted stock units ( 51,914 ) ( 2,006 ) — — — — — ( 2,006 )

Stock-based compensation — 7,741 — — — — — 7,741

Foreign currency translation gain — — — — 5 — — 5

Net income — — — — — 76,972 ( 1 ) 76,971

Balance at March 31, 2022 51,870,173 $ 471,088 — $ — $ 554 $ 802,101 $ 176 $ 1,273,919

Three Months Ended March 31, 2021 Common Stock and

Additional Paid-In

Capital Treasury Stock Accumulated

Comprehensive (Loss) Income Retained

Earnings Non-controlling Interest Total

Stockholders’

Shares Amount Shares Amount

Balance at December 31, 2020 50,651,054 $ 410,522 — $ — $ 396 $ 653,129 $ 173 $ 1,064,220

Exercise of stock options, net of taxes 511,801 9,577 — — — — — 9,577

Release of common stock shares upon vesting of restricted stock units 186,034 — — — — — — —

Shares withheld for the withholding tax on vesting of restricted stock units ( 61,982 ) ( 2,062 ) — — — — — ( 2,062 )

Stock repurchases and retirement ( 1,250,539 ) ( 42 ) — — — ( 43,628 ) — ( 43,670 )

Stock-based compensation — 7,494 — — — — — 7,494

Foreign currency translation loss — — — — ( 34 ) — — ( 34 )

Net income — — — — — 18,428 ( 5 ) 18,423

Balance at March 31, 2021 50,036,368 $ 425,489 — $ — $ 362 $ 627,929 $ 168 $ 1,053,948

Nine Months Ended March 31, 2022 Common Stock and

Three Months Ended September 30, 2022 Common Stock and

Additional Paid-In

Capital Treasury Stock Accumulated

Comprehensive

Income Retained

Capital Accumulated

Comprehensive Income (Loss) Retained

Earnings Non-controlling Interest Total

Stockholders’

Shares Amount Shares Amount

Shares Amount

Balance at June 30, 2022 52,311,014 $ 481,741 $ 911 $ 942,923 $ 172 $ 1,425,747

2 unchanged sentences

Shares withheld for the withholding tax on vesting of restricted stock units ( 58,303 ) ( 3,716 ) — — — ( 3,716 )

Shares repurchase and retirement — — — — — — —

Stock-based compensation — 11,014 — — — 11,014

Foreign currency translation gain — — — — 101 — — 101

Net income — — — — — 144,341 3 144,344

Balance at March 31, 2022 51,870,173 $ 471,088 — $ — $ 554 $ 802,101 $ 176 $ 1,273,919

Nine Months Ended March 31, 2021 Common Stock and

Other comprehensive loss — — ( 397 ) — — ( 397 )

Net income (loss) — — — 184,416 ( 5 ) 184,411

Balance at September 30, 2022 52,851,469 $ 497,183 $ 514 $ 1,127,339 $ 167 $ 1,625,203

Three Months Ended September 30, 2021 Common Stock and

Additional Paid-In

Capital Treasury Stock Accumulated

Comprehensive

(Loss) Income Retained

Capital Accumulated

Comprehensive Income (Loss) Retained

Earnings Non-controlling Interest Total

Stockholders’

Shares Amount Shares Amount

Shares Amount

Balance at June 30, 2021 50,582,078 $ 438,012 $ 453 $ 657,760 $ 173 $ 1,096,398

2 unchanged sentences

Shares withheld for the withholding tax on vesting of restricted stock units ( 54,071 ) ( 2,069 ) — — — ( 2,069 )

Share repurchase and retirement ( 5,306,165 ) ( 164 ) 1,333,125 20,491 — ( 140,985 ) — ( 120,658 )

Stock-based compensation — 7,015 — — — 7,015

Foreign currency translation gain — — — — 514 — — 514

Other comprehensive loss — — ( 4 ) — — ( 4 )

Net income — — — 25,437 3 25,440

Balance at March 31, 2021 50,036,368 $ 425,489 — $ — $ 362 $ 627,929 $ 168 $ 1,053,948

Balance at September 30, 2021 51,071,844 $ 448,976 $ 449 $ 683,197 $ 176 $ 1,132,798

See accompanying notes to condensed consolidated financial statements.

SMCI | Q1 2023 Form 10-Q | 4

SUPER MICRO COMPUTER, INC.

1 unchanged sentence

(in thousands)

Nine Months Ended

Three Months Ended

September 30,

OPERATING ACTIVITIES:

Net income $ 184,416 $ 25,437

Reconciliation of net income to net cash provided by operating activities:

Reconciliation of net income to net cash provided by (used in) operating activities:

Depreciation and amortization 8,547 7,548

Stock-based compensation expense 11,014 7,015

Recovery of allowance for doubtful accounts ( 815 ) ( 629 )

Allowance (recovery) for credit losses 233 ( 124 )

Provision for excess and obsolete inventories 9,625 3,478

Share of (income) loss from equity investee ( 882 ) 409

Share of loss (income) from equity investee 889 ( 388 )

Foreign currency exchange (gain) loss ( 9,203 ) 45

2 unchanged sentences

Changes in operating assets and liabilities:

Accounts receivable, net (including changes in related party balances of $( 25,405 ) and $( 3,532 ) during the nine months ended March 31, 2022 and 2021, respectively)

( 216,464 ) ( 3,036 )

Accounts receivable, net (including changes in related party balances of $( 1,851 ) and $( 5,315 ) during the three months ended September 30, 2022 and 2021, respectively)

Inventories ( 200,074 ) ( 147,087 )

Prepaid expenses and other assets (including changes in related party balances of $( 5,726 ) and $( 442 ) during the nine months ended March 31, 2022 and 2021, respectively)

Prepaid expenses and other assets (including changes in related party balances of $( 10,139 ) and $( 2,446 ) during the three months ended September 30, 2022 and 2021, respectively)

( 11,991 ) 6,109

Accounts payable (including changes in related party balances of $ 17,170 and $( 18,296 ) during the nine months ended March 31, 2022 and 2021, respectively)

Accounts payable (including changes in related party balances of $ 6,674 and $ 7,658 during the three months ended September 30, 2022 and 2021, respectively)

132,302 ( 54,343 )

1 unchanged sentence

Deferred revenue 85,989 13,115

Accrued liabilities (including changes in related party balances of $( 3,213 ) and $( 180 ) during the nine months ended March 31, 2022 and 2021, respectively)

4,644 ( 5,807 )

Other long-term liabilities (including changes in related party balances of $ 596 and $( 1,699 ) during the nine months ended March 31, 2022 and 2021, respectively)

Accrued liabilities (including changes in related party balances of $ 9,585 and $ 1,575 during the three months ended September 30, 2022 and 2021, respectively)

Other long-term liabilities (including changes in related party balances of $( 105 ) and $ 0 during the three months ended September 30, 2022 and 2021, respectively)

( 159 ) ( 1,461 )

1 unchanged sentence

INVESTING ACTIVITIES:

Purchases of property, plant and equipment (including payments to related parties of $ 2,505 and $ 5,845 during the nine months ended March 31, 2022 and 2021, respectively)

Purchases of property, plant and equipment (including payments to related parties of $ 729 and $ 400 during the three months ended September 30, 2022 and 2021, respectively)

( 10,746 ) ( 10,802 )

2 unchanged sentences

FINANCING ACTIVITIES:

Proceeds from borrowings, net of debt issuance costs 938,075 62,225

Proceeds from borrowings 79,141 269,806

Repayment of debt ( 414,737 ) ( 89,476 )

1 unchanged sentence

Payment of withholding tax on vesting of restricted stock units ( 3,716 ) ( 2,069 )

Stock repurchases — ( 117,968 )

Payments of obligations under finance leases ( 59 ) 34

Net cash provided by (used in) by financing activities

466,365 ( 48,445 )

Other ( 15 ) ( 17 )

Net cash (used in) provided by financing activities ( 331,183 ) 184,262

Effect of exchange rate fluctuations on cash ( 1,472 ) ( 11 )

Net increase (decrease) in cash, cash equivalents and restricted cash 15,146 ( 33,318 )

Net (decrease) increase in cash, cash equivalents and restricted cash ( 29,813 ) 37,778

Cash, cash equivalents and restricted cash at the beginning of the period 268,559 233,449

Cash, cash equivalents and restricted cash at the end of the period $ 238,746 $ 271,227

SMCI | Q1 2023 Form 10-Q | 5

Supplemental disclosure of cash flow information:

2 unchanged sentences

Non-cash investing and financing activities:

Unpaid property, plant and equipment purchases (including due to related parties of $ 729 and $ 1,502 as of March 31, 2022 and 2021, respectively)

Unpaid property, plant and equipment purchases (including due to related parties of $ 3,782 and $ 1,360 as of September 30, 2022 and 2021, respectively)

$ 6,599 $ 13,063

Right of use ("ROU") assets obtained in exchange for operating lease commitments $ 750 $ 6,119

Unpaid stock repurchases — 2,690

See accompanying notes to condensed consolidated financial statements.

SMCI | Q1 2023 Form 10-Q | 6

SUPER MICRO COMPUTER, INC.

2 unchanged sentences

Significant Accounting Policies and Estimates

No material changes have been made to the significant accounting policies of Super Micro Computer, Inc., a corporation incorporated under the laws of Delaware, and its consolidated entities (together, the “Company”), disclosed in Note 1, "Organization and Summary of Significant Accounting Policies," in its Annual Report on Form 10-K, filed on August 27, 2021, for the year ended June 30, 2021.

Management's estimates include, as applicable, the anticipated impacts of the coronavirus ("COVID-19") pandemic.

No material changes have been made to the significant accounting policies of Super Micro Computer, Inc., a corporation incorporated under the laws of Delaware, and its consolidated entities (together, the “Company”), disclosed in Part II, Item 8, Note 1, "Organization and Summary of Significant Accounting Policies," in its Annual Report on Form 10-K, filed on August 29, 2022, for the year ended June 30, 2022.

Management's estimates take into consideration, as applicable, general macroeconomic conditions, inflation, changes in interest rates and geopolitical events.

Basis of Presentation

3 unchanged sentences

The unaudited condensed consolidated financial statements included herein reflect all adjustments, including normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the consolidated financial position, results of operations and cash flows for the periods presented.

The consolidated results of operations for the three and nine months ended March 31, 2022 are not necessarily indicative of the results that may be expected for future quarters or for the fiscal year ending June 30, 2022.

The consolidated results of operations for the three months ended September 30, 2022 are not necessarily indicative of the results that may be expected for future quarters or for the fiscal year ending June 30, 2023.

Concentration of Supplier Risk

1 unchanged sentence

Shortages could occur in these materials due to an interruption of supply or increased demand in the industry.

Two suppliers accounted for 13.0 % and 19.4 % of total purchases for the three months ended March 31, 2022, and two suppliers accounted for 21.4 % and 14.7 % of total purchases for the three months ended March 31, 2021.

Two suppliers accounted for 18.0 % and 11.4 % of total purchases for the nine months ended March 31, 2022, and two suppliers accounted for 21.1 % and 13.8 % of total purchases for the nine months ended March 31, 2021.

Purchases from Ablecom, and Compuware, related parties of the Company (see Note 8, "Related Party Transactions") accounted for a combined 8.2 % and 7.3 % of total cost of sales for the three months ended March 31, 2022 and 2021, respectively, and a combined 9.0 % and 7.9 % of total cost of sales for the nine months ended March 31, 2022 and 2021, respectively.

Two suppliers accounted for 16.1 % and 25.7 % of total purchases for the three months ended September 30, 2022, and two suppliers accounted for 20.1 % and 6.3 % of total purchases for the three months ended September 30, 2021.

Purchases from Ablecom, and Compuware, related parties of the Company (see Part I, Item 1, Note 8, "Related Party Transactions") accounted for a combined 6.4 % and 9.6 % of total cost of sales for the three months ended September 30, 2022 and 2021, respectively.

Concentration of Credit Risk

Financial instruments which potentially subject the Company to concentration of credit risk consist primarily of cash and cash equivalents, restricted cash, investment in an auction rate security and accounts receivable.

One customer accounted for 10.2 % of the net sales for the three months ended March 31, 2022 and no customer accounted for 10% or more of the net sales for the nine months ended March 31, 2022 or for the three and nine months ended March 31, 2021.

No customer accounted for greater than 10% of the Company's accounts receivable, net as of March 31, 2022, whereas one customer accounted for 13.5 % of accounts receivable, net as of June 30, 2021.

One customer accounted for 21.9 % of the net sales for the three months ended September 30, 2022 and no single customer accounted for 10% or more of the net sales for the three months ended September 30, 2021.

Two customers accounted for greater than 10% of the Company's accounts receivable, net as of September 30, 2022 which accounted for 11.0 % and 10.3 %.

One customer accounted for 21.7 % of the Company's accounts receivable, net as of June 30, 2022.

Accounting Pronouncements Recently Adopted

In December 2019, the FASB issued amended guidance, Simplifying the Accounting for Income Taxes , to remove certain exceptions to the general principles from ASC 740 - Income Taxes, and to improve consistent application of U.S.

GAAP for other areas of ASC 740 by clarifying and amending existing guidance.

The guidance is effective for the Company from July 1, 2021.

The adoption of the guidance did not have a material impact on its condensed consolidated financial statements and disclosures.

There were no new pronouncements recently adopted.

SMCI | Q1 2023 Form 10-Q | 7

SUPER MICRO COMPUTER, INC.

5 unchanged sentences

The amendments in this update do not apply to contract modifications made after December 31, 2022, new hedging relationships entered into after December 31, 2022, and existing hedging relationships evaluated for effectiveness in periods after December 31, 2022, except for hedging relationships existing as of December 31, 2022 that apply certain optional expedients in which the accounting effects are recorded through the end of the hedging relationship.

The amendments are effective for all entities through December 31, 2022.

In January 2021, the FASB issued further guidance on this topic, which clarified the scope and application of the original guidance.

The amendments are effective for all entities on December 31, 2022, with early adoption permitted for an interim period beginning after March 12, 2020.

In April 2022, FASB issued a proposed accounting standard update for the deferral of the sunset date of Topic 848 and amendments to the definition of secured overnight financing rate (“SOFR").

The proposed amendment defers the sunset date of Topic 848 to December 31, 2024.

The Company has loans and lines of credit with various financial institutions.

Benchmark interest rates are used to calculate the interest on borrowings under the Chang Hwa Bank, CTBC, HSBC, Mega Bank Credit Facilities.

LIBOR is used to calculate the interest on borrowings under the Company's 2018 Bank of America Credit Facility and E.SUN Credit Facility.

The 2018 Bank of America Credit Facility was amended on June 28, 2021 which provided for a new maturity date of June 28, 2026 and fallback terms related to LIBOR replacement mechanics.

On March 3, 2022, the 2018 Bank of America Credit Facility was amended to, among other items, increase the size of the facility from $ 200.0 million to $ 350.0 million and update provisions relating to payments and LIBOR replacement mechanics to secured overnight financing rate (“SOFR").

As these amendments had other contemporaneous changes to the facility including the amount and not just directly related to LIBOR replacement, optional expedients under this guidance cannot be elected.

The Company is currently evaluating the overall impact of adoption of the guidance on its consolidated financial statements and disclosures.

LIBOR was used to calculate the interest on borrowings under the Company's 2018 Bank of America Credit Facility and E.SUN Credit Facility.

The 2018 Bank of America Credit Facility was amended on June 28, 2021 to provide for a new maturity date of June 28, 2026 and fallback terms related to LIBOR replacement mechanics.

As these amendments had other contemporaneous changes to the facility, including the amount of borrowings permitted under the facility and not just directly related to LIBOR replacement, optional expedients under this guidance cannot be elected.

The Company is currently evaluating the overall impact of the adoption of this guidance and does not expect it to have material impact on its consolidated financial statements and disclosures.

Disaggregation of Revenue

The Company disaggregates revenue by type of product and by geographical market in order to depict the nature, amount, and timing of revenue and cash flows.

The Company disaggregates revenue by type of product and by the geographical market in order to depict the nature, amount, and timing of revenue and cash flows.

Service revenues, which are less than 10%, are not a significant component of total revenue, and are aggregated within the respective categories.

1 unchanged sentence

Three Months Ended

March 31, Nine Months Ended

2022 2021 2022 2021

September 30,

Server and storage systems $ 1,713,056 $ 849,856

3 unchanged sentences

Subsystems and accessories are comprised of server boards, chassis and accessories.

SMCI | Q1 2023 Form 10-Q | 8

SUPER MICRO COMPUTER, INC.

1 unchanged sentence

International net sales are based on the country and geographic region to which the products were shipped.

The following is a summary for the three and nine months ended March 31, 2022 and 2021, of net sales by geographic region (in thousands):

The following is a summary for the three months ended September 30, 2022 and 2021, of net sales by geographic region (in thousands):

Three Months Ended

March 31, Nine Months Ended

2022 2021 2022 2021

September 30,

United States $ 1,295,504 $ 560,948

2 unchanged sentences

Other 51,528 29,002

$ 1,355,490 $ 895,881 $ 3,560,639 $ 2,488,437

Total $ 1,852,130 $ 1,032,730

Contract Balances

4 unchanged sentences

Such contract assets are insignificant to the Company’s condensed consolidated financial statements.

Contract liabilities consist of deferred revenue and relate to amounts invoiced to or advance consideration received from customers, which precede the Company’s satisfaction of the associated performance obligation(s).

The Company’s deferred revenue primarily results from customer payments received upfront for extended warranties and on-site services because these performance obligations are satisfied over time.

Additionally, at times, deferred revenue may fluctuate due to the timing of advance consideration received from non-cancellable non-refundable contract liabilities relating to the sale of future products.

Revenue recognized during the three and nine months ended March 31, 2022, which was included in the deferred revenue balance as of June 30, 2021 of $ 202.3 million, was $ 23.0 million and $ 79.7 million, respectively.

Deferred revenue increased $ 27.4 million as of March 31, 2022 as compared to the fiscal year ended June 30, 2021 mainly because the deferral on invoiced amounts for service contracts during the period exceeded the recognition of revenue from contracts entered into in prior periods.

Revenue recognized during the three months ended September 30, 2022, which was included in the deferred revenue balance as of June 30, 2022, of $ 233.8 million, was $ 33.5 million.

Deferred revenue increased $ 86.0 million as of September 30, 2022 as compared to the fiscal year ended June 30, 2022 of which $ 69.6 million was due to the increase in non-cancellable non-refundable advance consideration or cash consideration received from customers which preceded the Company's satisfaction of the associated performance obligations relating to product sales expected to be fulfilled in the next 12 months.

Transaction Price Allocated to the Remaining Performance Obligations

2 unchanged sentences

These performance obligations generally consist of services, such as on-site services, including integration services and extended warranty services that are contracted for one year or less, and products for which control has not yet been transferred.

The value of the transaction price allocated to remaining performance obligations as of March 31, 2022 was $ 229.8 million .

The value of the transaction price allocated to remaining performance obligations as of September 30, 2022 was $ 319.8 million .

The Company expects to recognize approximately 58 % of remaining performance obligations as revenue in the next 12 months, and the remainder thereafter.

SMCI | Q1 2023 Form 10-Q | 9

SUPER MICRO COMPUTER, INC.

11 unchanged sentences

Net Income Per Common Share

The following table shows the computation of basic and diluted net income per common share for the three and nine months ended March 31, 2022 and 2021 (in thousands, except per share amounts):

The following table shows the computation of basic and diluted net income per common share for the three months ended September 30, 2022 and 2021 (in thousands, except per share amounts):

Three Months Ended

March 31, Nine Months Ended

2022 2021 2022 2021

September 30,

Net income $ 184,416 $ 25,437

4 unchanged sentences

Diluted net income per common share $ 3.35 $ 0.48

For the three and nine months ended March 31, 2022 and 2021, the Company had stock options, restricted stock units ("RSUs") and performance based restricted stock units ("PRSUs") outstanding that could potentially dilute basic earnings per share in the future, but were excluded from the computation of diluted net income per share in the periods presented, as their effect would have been anti-dilutive.

The anti-dilutive common share equivalents resulting from outstanding equity awards were 452,611 and 578,892 for the three months ended March 31, 2022 and 2021, respectively, and 452,182 and 617,807 for the nine months ended March 31, 2022 and 2021, respectively.

For the three months ended September 30, 2022 and 2021, the Company had stock options, restricted stock units ("RSUs") and performance based restricted stock units ("PRSUs") outstanding that could potentially dilute basic earnings per share in the future, but were excluded from the computation of diluted net income per share in the periods presented, as their effect would have been anti-dilutive.

The anti-dilutive common share equivalents resulting from outstanding equity awards were 307,395 and 694,211 for the three months ended September 30, 2022 and 2021, respectively.

SMCI | Q1 2023 Form 10-Q | 10

SUPER MICRO COMPUTER, INC.

2 unchanged sentences

The following tables provide details of the selected balance sheet items (in thousands):

March 31, 2022 June 30, 2021

September 30, 2022 June 30, 2022

Finished goods $ 1,096,811 $ 1,025,555

2 unchanged sentences

Total inventories $ 1,736,055 $ 1,545,606

During the three and nine months ended March 31, 2022, the Company recorded a net provision for excess and obsolete inventory to cost of sales totaling $ 10.2 million and $ 13.9 million, respectively, and $ 2.9 million and $ 4.6 million for the three and nine months ended March 31, 2021, respectively.

During the three months ended September 30, 2022 and 2021, the Company recorded a net provision for excess and obsolete inventory to cost of sales totaling $ 9.6 million and $ 3.5 million, respectively.

The Company classifies subsystems and accessories that may be sold separately or incorporated into systems as finished goods.

Prepaid Expenses and Other Current Assets:

March 31, 2022 June 30, 2021

September 30, 2022 June 30, 2022

Other receivables (1)

$ 150,082 $ 138,054

Prepaid expenses 7,534 5,632

4 unchanged sentences

Total prepaid expenses and other current assets $ 169,245 $ 158,799

__________________________

(1) Includes other receivables from contract manufacturers based on certain buy-sell arrangements of $ 96.0 million and $ 76.2 million as of March 31, 2022 and June 30, 2021, respectively.

(1) Other receivables are receivables from contract manufacturers based on certain buy-sell arrangements of $ 120.3 million and $ 98.9 million as of September 30, 2022 and June 30, 2022, respectively.

Cash, Cash equivalents and Restricted cash:

March 31, 2022 June 30, 2021

September 30, 2022 June 30, 2022

Cash and cash equivalents $ 238,268 $ 267,397

2 unchanged sentences

Total cash, cash equivalents and restricted cash $ 238,746 $ 268,559

SMCI | Q1 2023 Form 10-Q | 11

SUPER MICRO COMPUTER, INC.

1 unchanged sentence

Property, Plant, and Equipment:

March 31, 2022 June 30, 2021

September 30, 2022 June 30, 2022

Buildings $ 143,496 $ 143,509

1 unchanged sentence

Land 84,616 84,616

Building and leasehold improvements 48,846 26,640

Furniture and fixtures 47,600 43,282

Building and leasehold improvements 45,709 45,169

Software 23,273 23,186

3 unchanged sentences

Property, plant and equipment, net $ 290,752 $ 285,972

__________________________

(1) Primarily relates to the development and construction costs associated with the Company’s Green Computing Park located in San Jose, California, and a new building in Taiwan.

Other Assets:

March 31, 2022 June 30, 2021

September 30, 2022 June 30, 2022

Operating lease right-of-use asset $ 22,497 $ 23,679

4 unchanged sentences

Restricted cash, non-current 478 911

Other 1,834 528

Others 1,897 1,956

Total other assets $ 37,144 $ 37,532

Accrued Liabilities:

March 31, 2022 June 30, 2021

September 30, 2022 June 30, 2022

Accrued payroll and related expenses $ 48,779 $ 57,736

Contract manufacturing liabilities 35,032 45,319

Contract manufacturers liabilities 48,579 41,125

Customer deposits 35,099 30,421

Accrued warranty costs 9,322 10,185

Accrued legal liabilities (Note 11) 18,250 18,250

Accrued cooperative marketing expenses 9,722 8,757

Accrued warranty costs 8,540 9,073

Operating lease liability 6,960 7,139

Accrued professional fees 3,130 4,281

Accrued legal liabilities 18,250 —

Other 29,916 30,446

Others 34,461 35,637

Total accrued liabilities $ 213,521 $ 212,419

SMCI | Q1 2023 Form 10-Q | 12

SUPER MICRO COMPUTER, INC.

7 unchanged sentences

As of June 30, 2021, the Company also expected it would likely pay the first tranche in full, and therefore recorded an expense of $ 3.6 million since March 2020 relating to the first tranche.

In September 2021, after the Company had closed its books for the year ended June 30, 2021, the Board decided to exercise its discretion to reduce the amount to be paid to the Chief Executive for the first tranche to $ 2.0 million, which was paid in the quarter ended December 31, 2021.

In September 2021, after the Company had closed its books for the year ended June 30, 2021, the Board decided to exercise its discretion to reduce the amount to be paid to the Chief Executive Officer for the first tranche to $ 2.0 million, which was paid in the quarter ended December 31, 2021.

As a result of the Board’s decision to reduce the amount to be paid under the first tranche, the Company adjusted the $ 3.6 million expense previously recorded for the first tranche to the new amount of $ 2.0 million, which resulted in the Company recognizing a $ 1.6 million benefit from this adjustment during the quarter ended September 30, 2021.

For the three months and nine months ended March 31, 2021, $ 2.5 million and $ 5.1 million of expense was recognized, respectively.

There was no expense or benefit related to this bonus for the three months ended March 31, 2022 .

For the nine months ended March 31, 2022 , the $ 1.6 million benefit described above is included.

This performance award to the Chief Executive Officer was concluded in the year ended June 30, 2022.

As such, there is no further transaction thereafter.

The benefit recognized during the three months ended September 30, 2022 and 2021 was none and $ 1.6 million, respectively.

Other Long-term Liabilities:

March 31, 2022 June 30, 2021

September 30, 2022 June 30, 2022

Accrued unrecognized tax benefits including related interests and penalties, non-current $ 19,686 $ 18,866

5 unchanged sentences

Three Months Ended

March 31, Nine Months Ended

2022 2021 2022 2021

September 30,

Balance, beginning of the period $ 12,136 $ 12,863

8 unchanged sentences

The Company classifies its financial instruments, except for its investment in an auction rate security, within Level 1 or Level 2 in the fair value hierarchy because the Company uses quoted prices in active markets or alternative pricing sources and models using market observable inputs to determine their fair value.

SMCI | Q1 2023 Form 10-Q | 13

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The Company’s investment in an auction rate security is classified within Level 3 of the fair value hierarchy as the determination of its fair value was not based on observable inputs as of March 31, 2022 and June 30, 2021.

The Company is using the discounted cash flow method to estimate the fair value of the auction rate security at each period end and the following assumptions:

1 unchanged sentence

The liquidity discount assumption is based on the management estimate of lack of marketability discount of similar securities and is determined based on the analysis of financial market trends over time, recent redemptions of securities and other market activities.

The Company performed a sensitivity analysis and applying a change of either plus or minus 100 basis points in the liquidity discount does not result in a significantly higher or lower fair value measurement of the auction rate security as of March 31, 2022.

Financial Assets and Liabilities Measured on a Recurring Basis

The following table sets forth the Company’s financial instruments as of March 31, 2022 and June 30, 2021, which are measured at fair value on a recurring basis by level within the fair value hierarchy.

The following table sets forth the Company’s financial instruments as of September 30, 2022 and June 30, 2022, which are measured at fair value on a recurring basis by level within the fair value hierarchy.

These are classified based on the lowest level of input that is significant to the fair value measurement (in thousands):

March 31, 2022 Level 1 Level 2 Level 3 Asset at

September 30, 2022 Level 1 Level 2 Level 3 Asset at

Money market funds (1)

$ 20,550 $ — $ — $ 20,550

Certificates of deposit (2)

3 unchanged sentences

Money market funds (1)

$ 20,220 $ — $ — $ 20,220

Certificates of deposit (2)

1 unchanged sentence

Total assets measured at fair value $ 20,220 $ 832 $ 1,590 $ 22,642

(1) $ 0.2 million and $ 0.2 million in money market funds are included in restricted cash, non-current in other assets in the condensed consolidated balance sheets as of March 31, 2022 and June 30, 2021, respectively.

(2) $ 0.2 million and $ 0.2 million in certificates of deposit are included in cash and cash equivalents, $ 0.3 million and $ 0.3 million in certificates of deposit are included in prepaid expenses and other assets, and $ 0.4 million and $ 0.4 million in certificates of deposit are included in restricted cash, non-current in other assets in the condensed consolidated balance sheets as of March 31, 2022 and June 30, 2021, respectively.

(1) $ 20.4 million and $ 20.0 million in money market funds are included cash and cash equivalents and $ 0.2 million and $ 0.2 million in money market funds are included in restricted cash, non-current in other assets in the condensed consolidated balance sheets as of September 30, 2022 and June 30, 2022, respectively.

(2) $ 0.2 million and $ 0.2 million in certificates of deposit are included in cash and cash equivalents, $ 0.1 million and $ 0.3 million in certificates of deposit are included in prepaid expenses and other assets, and $ 0.3 million and $ 0.3 million in certificates of deposit are included in restricted cash, non-current in other assets in the condensed consolidated balance sheets as of September 30, 2022 and June 30, 2022, respectively.

On a quarterly basis, the Company also evaluates the current expected credit loss by co nsidering factors such as historical experience, market data, issuer-specific factors, and current economic conditions.

For the three and nine months ended March 31, 2022, the credit losses related to the Company’s investments were not significant.

There was no movement in the balances of the Company's financial assets measured at fair value on a recurring basis, consisting of investment in an auction rate security, using significant unobservable inputs (Level 3) for the three and nine months ended March 31, 2022 and 2021.

There were no transfers between Level 1, Level 2 or Level 3 financial instruments in the three and nine months ended March 31, 2022 and 2021.

For the three months ended September 30, 2022, the credit losses related to the Company’s investments were not significant.

There were no transfers between Level 1, Level 2 or Level 3 financial instruments in the three months ended September 30, 2022 and 2021.

SMCI | Q1 2023 Form 10-Q | 14

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following is a summary of the Company’s investment in an auction rate security as of March 31, 2022 and June 30, 2021 (in thousands):

The following is a summary of the Company’s investment in an auction rate security as of September 30, 2022 and June 30, 2022 (in thousands):

Cost Basis Gross

1 unchanged sentence

Auction rate security $ 1,750 $ — $ ( 160 ) $ 1,590

No gain or loss was recognized in other comprehensive income for the auction rate security for the three and nine months ended March 31, 2022 and 2021.

No gain or loss was recognized in other comprehensive income for the auction rate security for the three months ended September 30, 2022 and 2021.

The Company measures the fair value of outstanding debt for disclosure purposes on a recurring basis.

As of March 31, 2022 and June 30, 2021, total debt of $ 547.5 million and $ 98.2 million, respectively, was reported at amortized cost.

As of September 30, 2022 and June 30, 2022, total debt of $ 249.7 million and $ 596.8 million, respectively, was reported at amortized cost.

This outstanding debt was classified as Level 2 as it was not actively traded.

1 unchanged sentence

Other Financial Assets - Investments into Non-Marketable Equity Securities

The Company's non-marketable equity securities are investments in privately held companies without readily determinable fair values in the amount of $ 1.2 million and $ 0.1 million as of March 31, 2022 and June 30, 2021, respectively.

The Company's non-marketable equity securities are investments in privately held companies without readily determinable fair values in the amount of $ 1.2 million as of September 30, 2022 and June 30, 2022.

The Company accounts for these investments at cost less impairment, if any, plus or minus changes from observable price changes in orderly transactions for the identical or similar investments by the same issuer.

During the three and nine months ended March 31, 2022 and 2021, the Company did not record any upward or downward adjustments to the carrying values of the non-marketable equity securities related to observable price changes.

The Company also did not record any impairment to the carrying values of the non-marketable equity securities during the three and nine months ended March 31, 2022 and 2021.

During the three months ended September 30, 2022 and 2021, the Company did not record any upward or downward adjustments to the carrying values of the non-marketable equity securities related to observable price changes.

The Company also did not record any impairment to the carrying values of the non-marketable equity securities during the three months ended September 30, 2022 and 2021.

SMCI | Q1 2023 Form 10-Q | 15

SUPER MICRO COMPUTER, INC.

1 unchanged sentence

Short-term and Long-term Debt

Short-term and long-term debt obligations as of March 31, 2022 and June 30, 2021 consisted of the following (in thousands):

March 31, June 30,

Short-term and long-term debt obligations as of September 30, 2022 and June 30, 2022 consisted of the following (in thousands):

September 30, June 30,

Line of credit:

Bank of America $ 241,469 $ —

CTBC Bank 101,000 18,000

HSBC Bank 30,000 —

E.SUN Bank 23,000 20,400

2018 Bank of America Credit Facility $ 60,284 $ 268,245

2022 Bank of America Credit Facility — 9,500

Cathay Bank Line of Credit — 30,000

2021 CTBC Credit Lines — 84,800

HSBC Bank Credit Facility 11,000 30,000

2021 E.SUN Bank Credit Facility 9,000 7,800

Mega Bank Credit Facility — 3,500

Total line of credit 80,284 433,845

CTBC Bank term loan, due August 31, 2022 $ — $ 25,090

Term loan facilities:

Chang Hwa Bank Credit Facility due October 15, 2026 31,487 33,643

CTBC Bank term loan, due June 4, 2030 37,785 40,372

CTBC Bank term loan, due December 27, 2027 5,505 —

E.SUN Bank term loan, due September 15, 2026 28,138 —

Mega Bank term loan, due September 15, 2026 41,803 —

Chang Hwa Bank term loan due October 15, 2026 34,835 —

2021 CTBC Credit Lines, due August 15, 2026 5,706 5,468

2021 E.SUN Bank Credit Facility, due September 15, 2026 40,304 43,064

2022 ESUN Bank Credit Facility, due August 15, 2027 16,373 —

Mega Bank Credit Facility, due September 15, 2026 37,785 40,372

Total term loans 169,440 162,919

2 unchanged sentences

Debt, non-current $ 148,551 $ 147,618

Activities under Revolving Lines of Credit and Term Loans

Bank of America

2018 Bank of America Credit Facility

In April 2018, the Company entered into a revolving line of credit with Bank of America for up to $ 250.0 million (as amended from time to time, the "2018 Bank of America Credit Facility").

On March 3, 2022, the 2018 Bank of America Credit Facility was amended to, among other items, increase the size of the facility from $ 200.0 million to $ 350.0 million and change provisions relating to payments and LIBOR replacement mechanics to secured overnight financing rate (“SOFR").

The obligations bear a base interest rate plus 0.5 % to 1.5 % based on the SOFR availability.

The amendment was accounted for as a modification and the impact was immaterial to the consolidated financial statements.

Prior to that, on June 28, 2021, the 2018 Bank of America Credit Facility was amended to, among other items, extend the maturity to June 28, 2026 and increase the maximum amount that the Company can request the facility be increased from $ 100 million to $ 150 million.

Interest accrued on any loans under the 2018 Bank of America Credit Facility is due on the first day of each month, and the loans are due and payable in full on the termination date of the 2018 Bank of America Credit Facility.

Voluntary prepayments are permitted without early repayment fees or penalties.

Subject to customary exceptions, the 2018 Bank of America Credit Facility is secured by substantially all of Super Micro Computer’s assets, other than real property assets.

Under the terms of the 2018 Bank of America Credit Facility, the Company is not permitted to pay any dividends.

The 2018 Bank of America Credit Facility contains customary representations and warranties and customary affirmative and negative covenants applicable to the Company and its subsidiaries and contains a financial covenant, which requires that the Company maintain a certain fixed charge coverage ratio, for each twelve-month period while in a Trigger Period, as defined in the agreement, is in effect.

SMCI | Q1 2023 Form 10-Q | 16

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

As of March 31, 2022, the total outstanding borrowings under the 2018 Bank of America Credit Facility were $ 241.5 million.

As of June 30, 2021, the Company had no outstanding borrowings under the 2018 Bank of America Credit Facility.

The interest rates under the 2018 Bank of America Credit Facility as of March 31, 2022 and June 30, 2021 range from 1.50 % to 1.54 %.

The balance of debt issuance costs outstanding as of March 31, 2022 and June 30, 2021 was $ 0.8 million and $ 0.5 million, respectively.

The Company is in compliance with all the covenants under the 2018 Bank of America Credit Facility, and as of March 31, 2022, the Company's available borrowing capacity was $ 108.5 million , subject to the borrowing base limitation and compliance with other applicable terms.

On March 23, 2022 (the “Effective Date”), the Company through its Taiwan subsidiary entered into an Uncommitted Facility Agreement for credit lines with Bank of America – Taipei Branch (the “2022 Bank of America Credit Facility”), for an amount not to exceed in aggregate $ 20.0 million.

The interest rate will be quoted by Bank of America – Taipei Branch for each drawdown.

As of March 31, 2022, there were no outstanding borrowings under this Bank of America Credit Facility.

Activities under Revolving Lines of Credit and Term Loans

Available borrowings and interest rates as of September 30, 2022 and June 30, 2022 consisted of the following (in thousands except for percentages):

September 30, 2022 June 30, 2022

Available borrowings Interest rate Available borrowings Interest rate

Line of credit:

2018 Bank of America Credit Facility $ 289,716 4.03 % $ 81,755 2.53 %

2022 Bank of America Credit Facility $ 20,000 3.36 % $ 10,500 1.85 %

Cathay Bank Line of Credit $ 132,000 4.328 % $ 102,000 4.004 %

2021 CTBC Credit Lines $ 105,000 1.80 % - 2.52 %

The Company through its Taiwan subsidiary was party to (i) that certain credit agreement, dated May 6, 2020, with CTBC Bank Co., Ltd.

(“CTBC Bank”), which provided for a ten-year , non-revolving term loan facility (the “2020 CTBC Term Loan Facility”) to obtain up to NTD 1,200.0 million ($ 40.7 million U.S.

dollar equivalent) and (ii) that certain credit agreement, dated August 24, 2020, with CTBC Bank (the “CTBC Credit Facility”), which provided for total borrowings of up to $ 50.0 million (collectively, the “Prior CTBC Credit Lines”).

On July 20, 2021 (the “Effective Date”), the Company through its Taiwan subsidiary entered into a general agreement for omnibus credit lines with CTBC Bank (the “2021 CTBC Credit Lines), which replaced the Prior CTBC Credit Lines in their entirety and permit borrowings, from time to time, pursuant to (i) a term loan facility of up to NTD 1,550.0 million ($ 55.4 million U.S.

dollar equivalents) including the existing 2020 CTBC Term Loan Facility of NTD 1,200.0 million ($ 42.9 million U.S.

dollar equivalents) and a new 75-month , non-revolving term loan facility of NTD 350.0 million ($ 12.5 million U.S.

dollar equivalents) to use to purchase machinery and equipment for the Company’s Bade Manufacturing Facility located in Taiwan (the “2021 CTBC Machine Loan”), and (ii) a line of credit facility of up to $ 105.0 million (the “2021 CTBC Credit Facility”), which increased the borrowing capacity of CTBC Credit Facility.

The 2021 CTBC Credit Facility provides ( i) a 12-month NTD 1,250.0 million ($ 44.7 million U.S.

dollar equivalent) term loan facility secured by the land and building located in Bade, Taiwan with an interest rate equal to the lender's established NTD interest rate plus 0.50 % per annum which is adjusted monthly, which term loan facility also includes a 12-month guarantee of up to NTD 100.0 million ($ 3.6 million U.S.

dollar equivalent) with an annual fee equal to 0.50 % per annum, and (ii) a 12-month revolving line of credit of up to 100 % of eligible accounts receivable in an aggregate amount of up to $ 105.0 million with an interest rate equal to the lender's established USD interest rate plus 0.70 % to 0.75 % per annum which is adjusted monthly.

Interest rates are to be established according to individual credit arrangements established pursuant to the 2021 CTBC Credit Lines, which interest rates shall be subject to adjustment depending on the satisfaction of certain conditions.

Term loans made pursuant to the 2021 CTBC Credit Lines are secured by certain of the Taiwan subsidiary’s assets, including certain property, land, plant, and equipment.

There are various financial covenants under the 2021 CTBC Credit Lines, including current ratio, debt service coverage ratio, and financial debt ratio requirements.

Amounts outstanding under the Prior CTBC Credit Lines on the Effective Date were assumed by the 2021 CTBC Credit Lines.

As of March 31, 2022 and June 30, 2021, the amounts outstanding under the 2020 CTBC Term Loan Facility were $ 41.7 million and $ 34.7 million, respectively.

The interest rates for these loans were 0.70 % per annum as of March 31, 2022, and 0.45 % as of June 30, 2021.

Under the 2021 CTBC Machine Loan, the amounts outstanding were $ 5.5 million on March 31, 2022.

The interest rates for this loan was 0.90 % per annum as of March 31, 2022.

As of June 30, 2021, there were no outstanding borrowings under the 2021 CTBC Machine Loan.

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The total outstanding borrowings under the 2021 CTBC Credit Facility term loan were denominated in NTD and remeasured into U.S.

dollars of $ 0.0 million and $ 25.1 million at March 31, 2022 and June 30, 2021, respectively.

The 2021 CTBC Credit Facility term loan was repaid on October 26, 2021.

The interest rate for the 2021 CTBC Credit Facility term loan was 0.75 % per annum as of June 30, 2021.

As of March 31, 2022 and June 30, 2021, the outstanding borrowings under the 2021 CTBC Credit Facility revolving line of credit were $ 101.0 million and $ 18.0 million, respectively.

The interest rates for these loans ranges from 0.94 % to 1.40 % per annum as of March 31, 2022 and 0.98 % per annum as of June 30, 2021.

As of March 31, 2022, the amount available for future borrowing under the 2021 CTBC Credit Facility was $ 4.0 million.

As of March 31, 2022, the net book value of land and building located in Bade, Taiwan, collateralizing the 2021 CTBC Credit Lines was $ 77.7 million.

The financial covenants under the 2021 CTBC Credit Lines will be reviewed by CTBC Bank every six months on June 30 and December 31.

2021 E.SUN Bank Credit Facility

The Company through its Taiwan subsidiary was party to that certain General Credit Agreement, dated December 2, 2020, with E.SUN Bank (“E.SUN Bank”), which provided for the issuance of loans, advances, acceptances, bills, bank guarantees, overdrafts, letters of credit, and other types of drawdown instruments up to a credit limit of US$ 30.0 million (the “Prior E.SUN Bank Credit Facility”).

The term of the Prior E.SUN Bank Credit Facility expired on September 18, 2021.

On September 13, 2021 (the “E.SUN Bank Effective Date”), the Company through its Taiwan subsidiary entered into a new General Credit Agreement with E.SUN Bank, which replaced the Prior E.SUN Bank Credit Facility (the “2021 E.SUN Bank Credit Facility”).

The 2021 E.SUN Bank Credit Facility permits borrowings of up to (i) NTD 1,600.0 million ($ 57.6 million U.S.

dollar equivalent) and (ii) $ 30.0 million as loans, advances, acceptances, bills, bank guarantees, overdrafts, letters of credit, and other types of drawdown instruments.

Other terms of the 2021 E.SUN Bank Credit Facility are substantially identical to the Prior E.SUN Bank Credit Facility.

Generally, interest for base rate loans made under the 2021 E.SUN Bank Credit Facility are based upon an average interbank overnight call loan rate in the finance industry (such as LIBOR or TAIFX) plus a fixed margin, and is subject to occasional adjustment.

The 2021 E.SUN Bank Credit Facility has customary default provisions permitting E.SUN Bank to terminate or reduce the credit limit, shorten the credit period, or deem all liabilities due and payable, including in the event the Taiwan subsidiary has an overdue liability at another financial organization.

There are various financial covenants under the 2021 E.SUN Bank Credit Facility, including current ratio, net debt ratio, and interest coverage requirements to be reviewed on a yearly basis at fiscal year end.

Terms for specific drawdown instruments issued under the 2021 E.SUN Bank Credit Facility, such as credit amount, term of use, mode of drawdown, specific lending rate, and other relevant terms, are to be set forth in Notifications and Confirmation of Credit Conditions (a “Notification and Confirmation”) negotiated with E.SUN Bank.

A Notification and Confirmation was entered into on the E.SUN Bank Effective Date for (i) a five-year , non-revolving term loan facility to obtain up to NTD 1,600.0 million ($ 57.6 million U.S.

dollar equivalent) in financing for use in research and development activities (the “Term Loan”), and (ii) a $ 30.0 million import loan (the “Import Loan”) with a tenor of 120 days.

As of March 31, 2022, the total outstanding borrowings under the Term Loan were denominated in NTD and remeasured into U.S.

dollars of $ 28.1 million and the interest rates for these loans were 1.245 % per annum.

As of March 31, 2022 and June 30, 2021 , the amounts outstanding under the Import Loan were $ 23.0 million and $ 20.4 million, respectively.

The interest rate for the quarter ended March 31, 2022 ranges from 1.09 % to 1.33 % per annum.

The interest rate for the quarter ended June 30, 2021 ranges from 1.00 % to 1.29 % per annum .

At March 31, 2022, the amount available for future borrowing under the Import Loan was $ 7.0 million .

Mega Bank Credit Facilities

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

On September 13, 2021 (the “Mega Bank Effective Date”), the Company through its Taiwan subsidiary entered into a NTD 1,200.0 million ($ 43.2 million U.S.

dollar equivalent) credit facility (the “Mega Bank Credit Facility”) with Mega International Commercial Bank (“Mega Bank”).

The Mega Bank Credit Facility will be used to support manufacturing activities (such as purchase of materials and components), and to provide medium-term working capital (the “Permitted Uses”).

Drawdowns under the Mega Bank Credit Facility may be made through December 31, 2024, with the first drawdown date not later than November 5, 2021.

The first drawdown date was on October 4, 2021.

Drawdowns may be in amounts of up to 80 % of Permitted Uses certified to the Bank in drawdown certificates.

The interest rate depends upon the amount borrowed under Mega Bank Credit Facility, and as of the Mega Bank Effective Date, ranged from 0.645 % to 0.845 % per annum.

The interest rate is subject to adjustment in certain circumstances, such as events of default.

Interest is payable monthly.

Principal payments for amounts borrowed commence on the 15 th day of the month following two years after the first drawdown, and are repaid in monthly installments over a period of three years thereafter.

The Mega Bank Credit Facility is unsecured and has customary default provisions permitting Mega Bank to reduce or cancel the extension of credit, or declare all principal and interest amounts immediately due and payable.

As of March 31, 2022, the total outstanding borrowings under the Mega Bank Credit Facility were denominated in NTD and remeasured into U.S.

dollars of $ 41.8 million and the interest rates ranged from 0.895 % to 1.095 % per annum.

Credit Agreement with Mega Bank

On April 25, 2022, the Company through its Taiwan subsidiary, entered into a $ 20.0 million (or foreign currency equivalent) (the “Credit Limit”) Omnibus Credit Authorization Agreement (the “Omnibus Credit Authorization Agreement”) with Mega Bank.

The Omnibus Credit Authorization Agreement permits individual credit authorizations subject to specified drawdown conditions up to the Credit Limit (on a revolving basis) to be used as loans for the purchase of materials or supplies.

During the loan period, the Company is required to maintain 100 % direct or indirect share ownership of the Taiwan subsidiary.

Pursuant to the Omnibus Credit Authorization Agreement, the Taiwan subsidiary also entered into both a Credit Authorization Agreement (the “Credit Authorization Agreement”) and Credit Authorization Approval Notice (the “Credit Authorization Approval Notice”) with Mega Bank and associated branch of Mega Bank, respectively.

Pursuant to such Agreement and Notice, Mega Bank permits the Taiwan subsidiary to make drawdowns up to the Credit Limit for short-term loans for material purchases with a tenor not to exceed 120 days on a revolving basis.

Drawdowns under the Mega Bank facility may be made through March 2023.

The interest rate for each individual credit authorization is adjusted according to the Mega Bank’s USD basic loan interest rate at the time of signing the agreement which was 0.90 % per annum.

Interest on such drawdowns is based upon TAIFX OFFER for six months plus 0.23 % and divided by 0.946 , subject to periodic adjustment and adjustment in certain other circumstances, such as failure to maintain a sufficient balance in a demand deposit account with Mega Bank which are subject to the bank’s right of set off.

The interest rate shall be adjusted once every month but shall not be lower than the USD basic loan interest rate plus 0.1 %.

If the loan involves the acceptance of bill of exchange, the Company would pay handling fee at the annual rate of 0.75 % calculated based on the number of actual acceptance days.

The fee is paid in full upon acceptance and a minimum handling fee of NTD 400 is charged for each transaction.

Amounts borrowed are otherwise unsecured, and the Credit Authorization Agreement has customary default provisions permitting Mega Bank to reduce the extension of credit, shorten the term for loan repayment or declare all of the amounts immediately due and payable.

The Company is not a guarantor under the Credit Authorization Agreement or Credit Authorization Approval Notice.

Chang Hwa Bank

$ 20,200 1.80 % - 2.52 %

Chang Hwa Bank Credit Facility $ 20,000 5.14 % $ 20,000 3.50 %

On October 5, 2021 (the “Chang Hwa Bank Effective Date”), the Company through its Taiwan subsidiary entered into a credit facility (the “Chang Hwa Bank Credit Facility”) with Chang Hwa Commercial Bank, Ltd.

(“Chang Hwa Bank”).

The Chang Hwa Bank Credit Facility permits borrowings of up to NTD 1,000.0 million ($ 36.0 million U.S.

dollar equivalent), including up to $ 20.0 million as loans, advances, acceptances, bills, bank guarantees, overdrafts, letters of credit, and other types of drawdown instruments.

The Chang Hwa Bank Credit Facility has customary default provisions permitting Chang Hwa Bank to terminate or reduce the credit limit, shorten the credit period, or deem all liabilities due and payable, including in cross-default provisions with respect to the other Taiwan subsidiary debt obligations.

Under the Chang Hwa Bank Credit Facility, Chang Hwa Bank has the right to demand collateral for debts owed.

As of March 31, 2022, the total outstanding borrowings under the Chang Hwa Bank Credit Facility were denominated in NTD and remeasured into U.S.

dollars of $ 34.8 million and the interest rate is 1.05 % per annum.

HSBC Bank Credit Facility $ 19,000 3.84 % $ — 1.95 % - 2.20 %

2021 E.SUN Bank Credit Facility $ — 1.81 % $ 22,200 1.81 %

2022 E.SUN Bank Credit Facility $ 21,000 4.18 % $ — —

Mega Bank Credit Facility $ 20,000 2.55 % $ 16,500 1.85 %

Term loan facilities:

Chang Hwa Bank Credit Facility due October 15, 2026 $ — 1.30 % $ — 1.175 %

CTBC Bank term loan, due June 4, 2030 $ — 0.95 % $ — 0.825 %

2021 CTBC Credit Lines, due August 15, 2026 $ 5,193 1.15 % $ 6,308 1.025 %

2021 E.SUN Bank Credit Facility, due September 15, 2026 $ — 1.495 % $ 10,766 1.37 %

2022 ESUN Bank Credit Facility, due August 15, 2027 $ — 1.495 % $ — —

Mega Bank Credit Facility, due September 15, 2026 $ — 1.145 % - 1.345 %

$ — 1.02 % - 1.22 %

The Company entered into a new General Credit Agreement with ESUN Bank during the three months ended September 30, 2022 with the following terms:

2022 E.SUN Bank Credit Facility

On August 9, 2022 (the “New E.SUN Bank Effective Date”), the Company through its Taiwan subsidiary entered into a new General Credit Agreement with E.SUN Bank, which replaced the 2021 E.SUN Bank Credit Facility (the “New E.SUN Bank Credit Facility”).

The New E.SUN Bank Credit Facility permits borrowings of up to (i) NTD 1.8 billion ($ 61.0 million U.S.

dollar equivalent) and (ii) US$ 30.0 million.

Other terms of the New E.SUN Bank Credit Facility are substantially identical to the Prior E.SUN Bank Credit Facility.

Generally, interest for base rate loans made under the New E.SUN Bank Credit Facility are based upon an average interbank overnight call loan rate in the finance industry (such as TAIFX) plus a fixed margin, and is subject to occasional adjustment.

The New E.SUN Bank Credit Facility has customary default provisions permitting E.SUN Bank to terminate or reduce the credit limit, shorten the credit period, or deem all liabilities due and payable, including in the event the Taiwan subsidiary has an overdue liability at another financial organization.

The Company is not a guarantor of the New E.SUN Bank Credit Facility.

SMCI | Q1 2023 Form 10-Q | 17

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Terms for specific drawdown instruments issued under the Chang Hwa Bank Credit Facility, such as credit amount, term of use, mode of drawdown, specific lending rate, and other relevant terms, are to be set forth in separate loan contracts (each, a “Loan Contract”) negotiated with Chang Hwa Bank.

On the Chang Hwa Bank Effective Date, three Loan Contracts were entered into.

None of the three Loan Contracts are secured and there are no financial covenants.

HSBC Bank Credit Facility

On January 7, 2022 (the “HSBC Bank Effective Date”), the Company through its Taiwan subsidiary entered into a General Loan, Export/Import Financing, Overdraft Facilities and Securities Agreement (the “Loan Agreement”) with the Taiwan affiliate of HSBC Bank (“HSBC Bank”).

The Loan Agreement provides for borrowings in the form of loans, export/import financings, overdrafts, commercial paper guaranties, and other types of drawdown instruments.

The Loan Agreement has customary default provisions permitting HSBC Bank to terminate or reduce the credit limit, shorten the credit period, or deem all liabilities due and payable, including in the event its Taiwan subsidiary fails to make payment of sums under another agreement which permits acceleration of maturity of such indebtedness.

The Company is not a guarantor of the Loan Agreement.

Terms for specific drawdown instruments issued under the Loan Agreement, such as credit amount, term of use, mode of drawdown, specific lending rate, and other relevant terms, may be set forth in Facility Letters (a “Facility Letter”) negotiated with the HSBC Bank.

Under a Facility Letter entered into on the HSBC Bank Effective Date, the Taiwan subsidiary and the HSBC Bank have agreed to a $ 30.0 million export/seller trade facility under the Loan Agreement with a tenor of 120 days.

The interest rate thereunder is based on the HSBC Bank’s base rate plus a fixed margin, subject to adjustment under certain circumstances.

Terms for specific drawdown instruments issued under the New E.SUN Bank Credit Facility, such as credit amount, term of use, mode of drawdown, specific lending rate, and other relevant terms, are to be set forth in Notifications and Confirmation of Credit Conditions (a “Notification and Confirmation”) negotiated with E.SUN Bank.

Under a Notification and Confirmation entered into on the New E.SUN Bank Effective Date, the Subsidiary and E.SUN Bank have agreed to both a medium term credit loan of NTD 680.0 million ($ 23.0 million U.S.

dollar equivalent) with a tenor of five years (the “Medium Term Loan”) and a drawdown of US $ 30.0 million under the E.SUN Bank Credit Facility for an import loan with a tenor of 120 days (the “Import O/A Loan”).

With respect to the Medium Term Loan, the period of use is between April 28, 2022 and April 28, 2023.

The interest rate thereunder is based upon a floating annual rate plus a fixed margin, subject to adjustment under certain circumstances.

Interest payments are due on a monthly basis.

Principal is amortized evenly on a monthly basis, with principal payments subject to a one year grace period prior to the commencement of repayment.

The Medium Term Loan will be used by the Taiwan subsidiary to support its manufacturing activities (such as purchase of materials and components) (“Use of Proceeds”).

Drawdowns may be in amounts of up to 80 % of permitted Use of Proceeds expenses.

The Subsidiary is subject to various financial covenants in connection with the Medium Term Loan, including a current ratio, net debt to equity ratio, and interest coverage ratio.

The current Medium Term Loan and the prior medium term loan under the Prior E.SUN Bank Credit Facility shall not exceed in aggregate NTD 1.8 billion.

With respect to the Import O/A Loan, the period of use is between April 28, 2022 and April 28, 2023.

The interest rate thereunder is based on TAIFX3 plus a fixed margin, subject to negotiation on a monthly basis and adjustment under certain circumstances.

Interest payments are due on a monthly basis, and principal is repayable on the due date.

As of March 31, 2022, the outstanding borrowings under the 2022 HSBC Bank Credit Facility revolving line of credit were $ 30.0 million.

The interest rates for these loans were approximately 0.96 % per annum as of March 31, 2022.

As of March 31, 2022, there was no amount available for future borrowing under the 2022 HSBC Bank Credit Facility.

Neither the Medium Term Loan nor Import O/A loan are secured.

As of September 30, 2022 the amount outstanding under the Import O/A Loan was $ 16.4 million.

The interest rate as of September 30, 2022 was 1.495 % per annum.

As of September 30, 2022 and June 30, 2022, the amounts outstanding under the Import O/A Loan were $ 9.0 million and $ 7.8 million, respectively.

The interest rate as of September 30, 2022 and June 30, 2022 was 4.18 % and 1.81 % per annum, respectively.

As of September 30, 2022, the amount available for future borrowing under the Import O/A Loan was $ 21.0 million.

Principal payments on short-term and long-term obligations are due as follows (in thousands):

Principal Payments

2022 $ 377,969

Remainder of 2023 $ 94,631

2028 and thereafter 16,426

Total short-term and long-term debt $ 249,724

The Company is in compliance with all the covenants for the outstanding debt.

SMCI | Q1 2023 Form 10-Q | 18

SUPER MICRO COMPUTER, INC.

1 unchanged sentence

The Company leases offices, warehouses and other premises, vehicles and certain equipment leased under non-cancelable operating leases.

Operating lease expense recognized and supplemental cash flow information related to operating leases for the three and nine months ended March 31, 2022 and 2021 were as follows (in thousands):

Operating lease expense recognized and supplemental cash flow information related to operating leases for the three months ended September 30, 2022 and 2021 were as follows (in thousands):

Three Months Ended

March 31, Nine Months Ended

2022 2021 2022 2021

Operating lease expense (including expense for lease agreements with related parties of $ 143 and $ 568 for the three and nine months ended March 31, 2022, respectively, and $ 347 and $ 1,040 for the three and nine months ended March 31, 2021, respectively)

September 30,

Operating lease expense (including expense for lease agreements with related parties of $ 143 and $ 246 for the three months ended September 30, 2022 and 2021, respectively)

$ 2,110 $ 2,182

Cash payments for operating leases (including payments to related parties of $ 141 and $ 631 for the three and nine months ended March 31, 2022, respectively, and $ 347 and $ 1,040 for the three and nine months ended March 31, 2021, respectively)

Cash payments for operating leases (including payments to related parties of $ 130 and $ 279 for the three months ended September 30, 2022 and 2021, respectively)

$ 2,038 $ 2,205

New operating lease assets obtained in exchange for operating lease liabilities $ 750 $ 6,119

During the three and nine months ended March 31, 2022 and 2021, the Company's costs related to short-term lease arrangements for real estate and non-real estate assets were immaterial.

Variable payments expensed in the three and nine months ended March 31, 2022 were $ 0.2 million and $ 0.7 million, respectively.

Variable payments expensed in the three and nine months ended March 31, 2021 were $ 0.4 million and $ 1.2 million, respectively.

As of March 31, 2022, the weighted average remaining lease term for operating leases was 4.0 years and the weighted average discount rate was 3.0 %.

Maturities of operating lease liabilities under noncancelable operating lease arrangements as of March 31, 2022 were as follows (in thousands):

Minimum lease payments

During the three months ended September 30, 2022 and 2021, the Company's costs related to short-term lease arrangements for real estate and non-real estate assets were immaterial.

Non-lease variable payments expensed in the three months ended September 30, 2022 and 2021 were immaterial .

As of September 30, 2022, the weighted average remaining lease term for operating leases was 3.6 years and the weighted average discount rate was 3.0 %.

Maturities of operating lease liabilities under noncancelable operating lease arrangements as of September 30, 2022 were as follows (in thousands):

Maturities of operating leases

2028 and beyond 535

2 unchanged sentences

Present value of operating lease liabilities $ 22,178

As of March 31, 2022, commitments under short-term lease arrangements, and operating and financing leases that have not yet commenced were immaterial.

As of September 30, 2022, commitments under short-term lease arrangements, and operating and financing leases that have not yet commenced were immaterial.

The Company has entered into lease agreements with related parties.

See Note 8, "Related Party Transactions," for discussion.

See Part I, Item 1, Note 8, "Related Party Transactions," for a further discussion.

SMCI | Q1 2023 Form 10-Q | 19

SUPER MICRO COMPUTER, INC.

6 unchanged sentences

Ablecom’s Chief Executive Officer, Steve Liang, is the brother of Charles Liang, the Company’s President, Chief Executive Officer and Chairman of the Board.

Steve Liang and his family members owned approximately 28.8 % of Ablecom’s stock and Charles Liang and his spouse, Sara Liu, who is also an officer and director of the Company, collectively owned approximately 10.5 % of Ablecom’s capital stock as of March 31, 2022.

Bill Liang, a brother of both Charles Liang and Steve Liang, is a member of the Board of Directors of Ablecom.

1 unchanged sentence

Steve Liang is also a member of Compuware’s Board of Directors and is an equity holder of Compuware.

Charles Liang and Sara Liu do not own any capital stock of Compuware and the Company does not own any of Ablecom or Compuware’s capital stock.

Neither Charles Liang nor Sara Liu own any capital stock of Compuware and the Company does not own any of Ablecom or Compuware’s capital stock.

Dealings with Ablecom

1 unchanged sentence

Under these agreements, the Company outsources to Ablecom a portion of its design activities and a significant part of its server chassis manufacturing as well as an immaterial portion of other components.

Ablecom manufactured approximately 88.8 % and 92.5 % of the chassis included in the products sold by the Company during the three months ended March 31, 2022 and 2021, respectively, and 82.5 % and 92.5 % of the chassis included in the products sold by the Company during the nine months ended March 31, 2022 and 2021, respectively.

Ablecom manufactured approximately 88.4 % and 92.5 % of the chassis included in the products sold by the Company during the three months ended September 30, 2022 and 2021, respectively.

With respect to design activities, Ablecom generally agrees to design certain agreed-upon products according to the Company’s specifications, and further agrees to build the tools needed to manufacture the products.

7 unchanged sentences

The Company’s exposure to financial loss as a result of its involvement with Ablecom is limited to potential losses on its purchase orders in the event of an unforeseen decline in the market price and/or demand of the Company’s products such that the Company incurs a loss on the sale or cannot sell the products.

Outstanding cancellable and non-cancellable purchase orders from the Company to Ablecom on March 31, 2022 were $ 44.6 million and $ 40.5 million, respectively, and outstanding cancellable and non-cancellable purchase orders from the Company to Ablecom on June 30, 2021 were $ 44.9 million and $ 40.2 million, respectively, effectively representing the exposure to financial loss.

Outstanding cancellable and non-cancellable purchase orders from the Company to Ablecom on September 30, 2022 were $ 37.1 million and $ 28.7 million, respectively, and outstanding cancellable and non-cancellable purchase orders from the Company to Ablecom on June 30, 2022 were $ 39.5 million and $ 36.0 million, respectively, effectively representing the exposure to financial loss.

The Company does not directly or indirectly guarantee any obligations of Ablecom, or any losses that the equity holders of Ablecom may suffer.

Since Ablecom manufactures substantially all the chassis that the Company incorporates into its products, if Ablecom were to suddenly be unable to manufacture chassis for the Company, the Company’s business could suffer if the Company is unable to quickly qualify substitute suppliers who can supply high-quality chassis to the Company in volume and at acceptable prices.

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Dealings with Compuware

1 unchanged sentence

Compuware assumes the responsibility to install the Company's products at the site of the end customer, if required, and administers customer support in exchange for a discount from the Company's standard price for its purchases.

SMCI | Q1 2023 Form 10-Q | 20

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The Company also has entered into a series of agreements with Compuware, including multiple product development, production and service agreements, product manufacturing agreements, and lease agreements for office space.

7 unchanged sentences

The Company sells to Compuware most of the components needed to manufacture the above products.

Compuware uses the components to manufacture the products and then sells the products back to the Company at a purchase price equal to the price at which the Company sold the components to Compuware, plus a “manufacturing value added” fee and other miscellaneous charges and costs including overhead and labor.

The Company and Compuware frequently review and negotiate the amount of the “manufacturing value added” fee that will be included in the price of the products the Company purchases from Compuware.

1 unchanged sentence

The Company’s exposure to financial loss as a result of its involvement with Compuware is limited to potential losses on its purchase orders in the event of an unforeseen decline in the market price and/or demand of the Company’s products such that the Company incurs a loss on the sale or cannot sell the products.

Outstanding cancellable and non-cancellable purchase orders from the Company to Compuware on March 31, 2022 were $ 192.4 million and $ 42.3 million, respectively and outstanding cancellable and non-cancellable purchase orders from the Company to Compuware on June 30, 2021 were $ 123.3 million and $ 71.0 million, respectively, effectively representing the exposure to financial loss.

Outstanding cancellable and non-cancellable purchase orders from the Company to Compuware on September 30, 2022 were $ 198.9 million and $ 69.0 million, respectively, and outstanding cancellable and non-cancellable purchase orders from the Company to Compuware on June 30, 2022 were $ 213.3 million and $ 44.3 million, respectively, effectively representing the exposure to financial loss.

The Company does not directly or indirectly guarantee any obligations of Compuware, or any losses that the equity holders of Compuware may suffer.

5 unchanged sentences

The Company recorded a deferred gain related to the contribution of certain technology rights.

As of March 31, 2022 and June 30, 2021, the Company had unamortized deferred gain balance of $ 0 million and $ 1.0 million, respectively, in accrued liabilities in the Company’s condensed consolidated balance sheets.

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

As of September 30, 2022 and June 30, 2022, the Company had no unamortized deferred gain balance in accrued liabilities and none in other long-term liabilities in the Company’s condensed consolidated balance sheets.

The Company monitors the investment for events or circumstances indicative of potential impairment and makes appropriate reductions in carrying values if it determines that an impairment charge is required.

In June 2020, the third-party parent company that controls the Corporate Venture was placed on a U.S.

government export control list, along with several of the third-party parent's related entities and a separate listing for one of its subsidiaries.

government export control list, along with several of such third-party parent's related entities and a separate listing for one of its subsidiaries.

The Corporate Venture is not itself a restricted party.

The Company has concluded that the Corporate Venture is in compliance with the new restrictions.

The Company does not believe that the equity investment carrying value is impacted as of March 31, 2022.

No impairment charge was recorded for the three and nine months ended March 31, 2022 and 2021, respectively.

The Company sold products to the Corporate Venture and the Company’s share of intra-entity profits on the products that remained unsold by the Corporate Venture have been eliminated and have reduced the carrying value of the Company’s investment in the Corporate Venture.

The Company does not believe that the equity investment carrying value is impacted as of September 30, 2022.

No impairment charge was recorded for the three months ended September 30, 2022 or 2021.

SMCI | Q1 2023 Form 10-Q | 21

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The Company sold products worth $ 11.6 million and $ 15.2 million to the Corporate Venture for the three months ended September 30, 2022 and 2021, respectively, and the Company’s share of intra-entity profits on the products that remained unsold by the Corporate Venture as of September 30, 2022 and June 30, 2022 have been eliminated and have reduced the carrying value of the Company’s investment in the Corporate Venture.

To the extent that the elimination of intra-entity profits reduces the investment balance below zero, such amounts are recorded within accrued liabilities.

Dealings with Monolithic Power Systems, Inc.

The Company procures certain semiconductor products from Monolithic Power Systems, Inc.

(“MPS”), a fabless manufacturer of high-performance analog and mixed-signal semiconductors, for use in its products.

A member of the Board of Directors, also serves as an officer of MPS.

The Company had the following balances related to transactions with its related parties as of March 31, 2022 and June 30, 2021 (in thousands):

Ablecom Compuware Corporate Venture MPS Total

March 31, 2022 June 30, 2021 March 31, 2022 June 30, 2021 March 31, 2022 June 30, 2021 March 31, 2022 June 30, 2021 March 31, 2022 June 30, 2021

The Company had $ 9.4 million and $ 8.0 million due from the Corporate Venture in accounts receivable, net as of September 30, 2022 and June 30, 2022, respectively.

The Company had the following balances related to transactions with its related parties as of September 30, 2022 and June 30, 2022 (in thousands):

Ablecom Compuware Corporate Venture Total

September 30, 2022 June 30, 2022 September 30, 2022 June 30, 2022 September 30, 2022 June 30, 2022 September 30, 2022 June 30, 2022

Accounts receivable $ 2 $ 2 $ 882 $ 404 $ 9,365 $ 7,992 $ 10,249 $ 8,398

Other receivable (1)

$ 3,540 $ 4,816 $ 31,011 $ 19,596 $ — $ — $ 34,551 $ 24,412

Accounts payable $ 43,127 $ 42,463 $ 50,902 $ 44,892 $ — $ — $ 94,029 $ 87,355

Accrued liabilities (2)

$ 1,999 $ 3,531 $ 26,262 $ 15,145 $ — $ — $ 28,261 $ 18,676

(1) Other receivables include receivables from vendors included in prepaid and other current assets.

(2) Includes current portion of operating lease liabilities included in other current liabilities.

The Company's results from transactions with its related parties for each of the three months ended March 31, 2022 and 2021, are as follows (in thousands):

Ablecom Compuware Corporate Venture MPS Total

Three months ended March 31, Three months ended March 31, Three months ended March 31, Three months ended March 31, Three months ended March 31,

The Company's results from transactions with its related parties for each of the three months ended September 30, 2022 and 2021, are as follows (in thousands):

Ablecom Compuware Corporate Venture MPS (1)

Three months ended September 30, Three months ended September 30, Three months ended September 30, Three months ended September 30, Three months ended September 30,

2022 2021 2022 2021 2022 2021 2022 2021 2022 2021

2 unchanged sentences

Purchases - other miscellaneous items $ 4,763 $ 2,116 $ 258 $ 339 $ — $ — $ — $ — $ 5,021 $ 2,455

(1) MPS ceased to be a related party in the quarter ended September 30, 2022.

SMCI | Q1 2023 Form 10-Q | 22

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The Company's results from transactions with its related parties for each of the nine months ended March 31, 2022 and 2021, are as follows (in thousands):

Ablecom Compuware Corporate Venture MPS Total

Nine months ended March 31, Nine months ended March 31, Nine months ended March 31, Nine months ended March 31, Nine months ended March 31,

2022 2021 2022 2021 2022 2021 2022 2021 2022 2021

Net sales $ 12 $ ( 25 ) $ 22,932 $ 22,451 $ 97,262 $ 36,427 $ — $ — $ 120,206 $ 58,853

Purchases - inventory $ 147,780 $ 77,838 $ 126,039 $ 87,330 $ — $ — $ 6,074 $ 2,677 $ 279,893 $ 167,845

Purchases - other miscellaneous items $ 6,671 $ 7,482 $ 1,090 $ 1,434 $ — $ — $ — $ — $ 7,761 $ 8,916

The Company’s cash flow impact from transactions with its related parties for each of the nine months ended March 31, 2022 and 2021, are as follows (in thousands):

Ablecom Compuware Corporate Venture MPS Total

Nine months ended March 31, Nine months ended March 31, Nine months ended March 31, Nine months ended March 31, Nine months ended March 31,

The Company’s cash flow impact from transactions with its related parties for each of the three months ended September 30, 2022 and 2021, are as follows (in thousands):

Ablecom Compuware Corporate Venture MPS (1)

Three months ended September 30, Three months ended September 30, Three months ended September 30, Three months ended September 30, Three months ended September 30,

2022 2021 2022 2021 2022 2021 2022 2021 2022 2021

6 unchanged sentences

Unpaid property, plant and equipment $ 3,782 $ 1,360 $ — $ — $ — $ — $ — $ — $ 3,782 $ 1,360

(1) MPS ceased to be a related party in the quarter ended September 30, 2022.

Tripartite Agreement

On November 8, 2021, Super Micro Computer Inc., Taiwan (the “Subsidiary”), a Taiwan corporation and wholly-owned subsidiary of the Company, entered into a Tripartite Agreement (the “Agreement”) with Ablecom and Compuware related to a three-way purchase of land.

Pursuant to the Agreement, the Subsidiary will participate in purchasing 33.33 % of the 137,225.97 square meters (approximately 34 acres) of land Ablecom has agreed to acquire from third-party landowners in proximity to the Company’s campus in Bade, Taiwan.

Compuware will acquire 17.21 % of such land and Ablecom will retain the remaining 49.46 % of the land.

Under the Agreement, fees and costs related to such land purchase would be borne by the parties according to their proportionate share of the land purchased.

The Company intends to fund its proportionate share of the land purchased under the Agreement which is estimated to be approximately NTD 789 million (or approximately US$ 28.3 million) from either available cash and/or borrowings under loan agreements the Subsidiary has in Taiwan.

Amounts payable related to the purchase of the land are due in three installments based upon the achievement of specified milestones.

The transaction is subject to various customary conditions precedent, including the receipt of government approvals, the discharge of mortgages and leases on the land, and the completion of due diligence.

As of March 31, 2022, due diligence and discussions with government officials are continuing, and no installment payments have been made with respect to the transaction.

If the transaction does not close within 12 months, Ablecom may offer the land to other parties.

While the Agreement is currently still in effect, Ablecom has advised that its underlying agreements to acquire land from the third-party landowners in proximity to the Company’s campus in Bade, Taiwan have been terminated.

SMCI | Q1 2023 Form 10-Q | 23

SUPER MICRO COMPUTER, INC.

2 unchanged sentences

Equity Incentive Plan

On June 5, 2020, the stockholders of the Company approved the 2020 Equity and Incentive Compensation Plan (the "2020 Plan").

The maximum number of shares available under the 2020 Plan is 5,000,000 plus 1,045,000 shares of common stock that remained available for future awards under the 2016 Equity Incentive Plan (the “2016 Plan”), at the time of adoption of the 2020 Plan.

No other awards can be granted under the 2016 Plan.

7,246,000 shares of common stock remain reserved for outstanding awards issued under the 2016 Plan at the time of adoption of the 2020 Plan.

As of March 31, 2022, the Company had 1,979,112 authorized shares available for future issuance under the 2020 Plan.

On June 5, 2020, the stockholders of the Company approved the 2020 Equity and Incentive Compensation Plan (the "Original 2020 Plan").

The maximum number of shares available under the Original 2020 Plan is 5,000,000 plus 1,045,000 shares of common stock that remained available for future awards under the 2016 Equity Incentive Plan (the “2016 Plan”), at the time of adoption of the Original 2020 Plan.

No other awards can be granted under the 2016 Plan and 7,246,000 shares of common stock remain reserved for outstanding awards issued under the Original 2016 Plan at the time of adoption of the Original 2020 Plan.

On May 18, 2022, the stockholders of the Company approved an amendment and restatement of the Original 2020 Plan (as amended and restated, the “2020 Plan”) which, among other things, increased the number of shares available for award under the 2020 Plan by an additional 2,000,000 shares.

Under the 2020 Plan, the Company can grant stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units, dividend equivalents, and certain other awards, including those denominated or payable in, or otherwise based on, the Company’s common stock.

The exercise price per share for incentive stock options granted to employees owning shares representing more than 10 % of the Company's outstanding voting stock at the time of grant cannot be less than 110 % of the fair value of the underlying shares on the grant date.

Nonqualified stock options and incentive stock options granted to all other persons are granted at a price not less than 100 % of the fair value.

Options generally expire ten years after the date of grant.

Stock options and RSUs generally vest over four years ;

25 % at the end of one year and one sixteenth per quarter thereafter.

As of September 30, 2022, the Company had 3,095,739 authorized shares available for future issuance under the 2020 Plan.

Common Stock Repurchase

On January 29, 2021, a duly authorized subcommittee of the Board of Directors approved a share repurchase program to repurchase up to an aggregate of $ 200.0 million of the Company's common stock at market prices.

The program is effective until the earlier of July 31, 2022 or the date when the maximum amount of common stock is repurchased.

The Company had $ 150.0 million of remaining availability under the share repurchase program as of March 31, 2022.

There were no shares repurchased under the share repurchase program during the three and nine months ended March 31, 2022.

On August 3, 2022, after the expiration of a prior share repurchase program on July 31, 2022, a duly authorized subcommittee of the Company's Board approved a new share repurchase program to repurchase shares of the Company’s common stock for up to $ 200 million at prevailing prices in the open market.

The share repurchase program is effective until January 31, 2024 or until the maximum amount of common stock is repurchased, whichever occurs first.

No shares were repurchased under any share repurchase programs during the three months ended September 30, 2022.

Determining Fair Value

4 unchanged sentences

Expected Term—The Company’s expected term represents the period that the Company’s stock-based awards are expected to be outstanding and was determined based on the Company's historical experience.

Expected Volatility—Expected volatility is based on the Company's historical volatility.

Expected Volatility—Expected volatility is based on the Company's implied and historical volatility.

Expected Dividend—The Black-Scholes valuation model calls for a single expected dividend yield as an input and the Company has no plans to pay dividends.

Risk-Free Interest Rate—The risk-free interest rate used in the Black-Scholes valuation method is based on the United States Treasury zero coupon issues in effect at the time of grant for periods corresponding with the expected term of option.

The fair value of stock option grants for the three and nine months ended March 31, 2022 and 2021 was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:

SMCI | Q1 2023 Form 10-Q | 24

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The fair value of stock option grants for the three months ended September 30, 2022 and 2021 was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:

Three Months Ended

March 31, Nine Months Ended

2022 2021 2022 2021

September 30,

Risk-free interest rate 2.81 % - 4.06 %

0.81 % - 1.65 %

0.27 % - 0.58 %

Expected term 6.09 years 5.98 years 6.09 years 5.98 years

Expected term 6.07 years 6.09 years

Dividend yield — % — %

Volatility 50.62 % - 51.30 %

49.69 % - 49.99 %

50.32 % - 50.43 %

Weighted-average fair value $ 28.67 $ 17.94

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table shows total stock-based compensation expense included in the condensed consolidated statements of operations for the three and nine months ended March 31, 2022 and 2021 (in thousands):

The following table shows total stock-based compensation expense included in the condensed consolidated statements of operations for the three months ended September 30, 2022 and 2021 (in thousands):

Three Months Ended

March 31, Nine Months Ended

2022 2021 2022 2021

September 30,

Cost of sales $ 884 $ 447

5 unchanged sentences

Stock-based compensation expense, net $ 9,675 $ 5,127

As of March 31, 2022, $ 9.6 million of unrecognized compensation expense related to stock options is expected to be recognized over a weighted-average period of 3.57 years, $ 53.0 million of unrecognized compensation cost related to unvested RSUs is expected to be recognized over a weighted-average period of 2.72 years and unrecognized compensation cost of $ 0.1 million related to unvested PRSUs was recognized during the nine months ended March 31, 2022.

As of September 30, 2022, $ 14.5 million of unrecognized compensation cost related to stock options is expected to be recognized over a weighted-average period of 3.20 years and $ 73.1 million of unrecognized compensation cost related to unvested RSUs is expected to be recognized over a weighted-average period of 2.52 years.

Additionally, as described below, $ 4.3 million of unrecognized compensation cost related to the 2021 CEO Performance Stock Option is expected to be recognized over a period of 2.75 years.

Stock Option Activity

In March 2021, the Company’s Compensation Committee of the Board of Directors (the “Compensation Committee”) approved the grant of a stock option award for 1,000,000 common stock shares to the Company’s CEO (the “2021 CEO Performance Stock Option”).

The 2021 CEO Performance Stock Option has five vesting tranches with a vesting schedule based entirely on the attainment of operational milestones (performance conditions) and market conditions, assuming (1) continued employment either as the CEO or in such capacity as agreed upon between the Company’s CEO and the Board of Directors and (2) service through each vesting date.

Each of the five vesting tranches of the 2021 CEO Performance Stock Option will vest upon certification by the Compensation Committee that both (i) the market price milestone for such tranche, which begins at $ 45.00 per share for the first tranche and increases up to $ 120.00 per share thereafter (based on a 60 calendar day trailing average, counting only trading days), has been achieved, and (ii) any one of the following five operational milestones focused on total revenue, as reported under U.S.

In March 2021, the Company’s Compensation Committee of the Board of Directors (the “Compensation Committee”) approved the grant of a stock option award for 1,000,000 shares of common stock to the Company’s CEO (the “2021 CEO Performance Stock Option”).

Each of the five vesting tranches of the 2021 CEO Performance Stock Option will vest upon certification by the Compensation Committee that both (i) the market price milestone for such tranche, which begins at $ 45.00 per share for the first tranche and increases up to $ 120.00 per share thereafter (based on a 60 trading day average stock price), has been achieved, and (ii) any one of five operational milestones focused on total revenue, as reported under U.S.

GAAP, have been achieved for the previous four consecutive fiscal quarters.

Upon vesting and exercise, including the payment of the exercise price of $ 45.00 per share, prior to March 2, 2024, the Company’s CEO must hold shares that he acquires until March 2, 2024, other than those shares sold pursuant to a cashless exercise where shares are simultaneously sold to pay for the exercise price and any required tax withholding.

The achievement status of the operational and stock price milestones as of March 31, 2022 was as follows:

Annualized Revenue Milestone Achievement Status Stock Price Milestone Achievement Status

(in billions)

$ 4.0 Achieved $ 45 Not met

$ 4.8 Probable $ 60 Not met

$ 5.8 Probable $ 75 Not met

$ 6.8 Probable $ 95 Not met

$ 8.0 Improbable $ 120 Not met

SMCI | Q1 2023 Form 10-Q | 25

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The achievement status of the operational and stock price milestones as of September 30, 2022 was as follows:

Annualized Revenue Milestone Achievement Status Stock Price Milestone Achievement Status

(in billions)

$ 4.0 Achieved $ 45 Achieved (1)

$ 4.8 Achieved $ 60 Achieved (2)

$ 5.8 Probable $ 75 Not yet achieved

$ 6.8 Probable $ 95 Not yet achieved

$ 8.0 Probable $ 120 Not yet achieved

(1) The vesting of the first tranche of 200,000 option shares under the 2021 CEO Performance Stock Option, representing one-fifth of such award, was certified by the Company's Compensation Committee in August 2022.

(2) The vesting of the second tranche of 200,000 option shares under the 2021 CEO Performance Stock Option representing one-fifth of such award was certified by the Company's Compensation Committee on October 25, 2022.

On the grant date, a Monte Carlo simulation was used to determine for each tranche (i) a fixed expense amount for such tranche and (ii) the future time when the market price milestone for such tranche was expected to be achieved, or its “expected market price milestone achievement time.” Separately, based on a subjective assessment of the Company’s future financial performance, each quarter, the Company will determine whether achievement is probable for each operational milestone that has not previously been achieved or deemed probable of achievement, and, if so, the future time when the Company expects to achieve that operational milestone, or its “expected operational milestone achievement time.” When the Company first determines that an operational milestone has become probable of being achieved, the Company will allocate the entire expense for the related tranche over the number of quarters between the grant date and the then-applicable “expected vesting time.” The “expected vesting time” at any given time is the later of (i) the expected operational milestone achievement time (if the related operational milestone has not yet been achieved) and (ii) the expected market price milestone achievement time (if the related market price milestone has not yet been achieved).

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Each quarter thereafter, the Company will recognize the prorated portion of the then-remaining expense for the tranche based on the number of quarters between such quarter and the then-applicable expected vesting time, except that upon vesting of a tranche, all remaining expenses for that tranche will be immediately recognized.

During the three and nine months ended March 31, 2022, the Company recognized compensation expense related to the 2021 CEO Performance Stock Option of $ 1.5 million and $ 5.3 million, respectively.

During the three and nine months ended March 31, 2021, the Company recognized compensation expense related to the 2021 CEO Performance Stock Option of $ 0.3 million and $ 0.3 million, respectively.

As of March 31, 2022 and June 30, 2021, the Company had $ 5.2 million and $ 10.5 million, respectively, in unrecognized compensation cost related to the 2021 CEO Performance Stock Option.

The unrecognized compensation cost as of March 31, 2022 is expected to be recognized over a period of more than 2.75 years.

The following table summarizes stock option activity during the nine months ended March 31, 2022 under all plans:

During the three months ended September 30, 2022 and 2021, the Company recognized compensation expense related to the 2021 CEO Performance Stock Option of $ 1.3 million and $ 0.9 million, respectively.

As of September 30, 2022 and June 30, 2022, the Company had $ 4.3 million and $ 5.6 million, respectively, in unrecognized compensation cost related to the 2021 CEO Performance Stock Option.

The unrecognized compensation cost as of September 30, 2022 is expected to be recognized over a period of more than 2.75 years.

SMCI | Q1 2023 Form 10-Q | 26

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table summarizes stock option activity during the three months ended September 30, 2022 under all plans:

Outstanding Weighted

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Forfeited/Cancelled ( 9,238 ) $ 26.61

Balance as of March 31, 2022 4,417,440 $ 28.64 5.50

Options vested and exercisable at March 31, 2022 2,700,170 $ 21.61 3.38

Balance as of September 30, 2022 4,020,702 $ 31.79 5.77

Options vested and exercisable at September 30, 2022 2,373,832 $ 24.87 3.78

RSU and PRSU Activity

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Each tranche has 15,000 RSUs that vest in May 2021 and November 2021 based on service conditions only.

Additional units can be earned based on revenue growth percentage in fiscal year 2020 compared to fiscal year 2019, which units would vest in May 2021, and based on revenue growth percentage in fiscal year 2021 compared to fiscal year 2020, which units have vested in November 2021.

Additional units were earned based on revenue growth percentage in fiscal year 2020 compared to fiscal year 2019, which units vested in May 2021, and based on revenue growth percentage in fiscal year 2021 compared to fiscal year 2020, which units vested in November 2021.

No additional units were earned for fiscal year 2020 as revenue decreased from fiscal year 2019.

An additional 2,939 units were earned for fiscal year 2021 that vested on November 10, 2021.

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table summarizes RSU and PRSU activity during the nine months ended March 31, 2022 under all plans:

An additional 2,939 units were earned for fiscal year 2021 that was vested on November 10, 2021.

The following table summarizes RSU and PRSU activity during the three months ended September 30, 2022 under all plans:

Time-Based RSUs

Outstanding Weighted

Grant-Date Fair Value per Share PRSUs

Outstanding Weighted

Grant-Date Fair Value per Share

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Forfeited ( 52,535 ) $ 36.99

Balance as of March 31, 2022 1,902,889 $ 32.09 — $ —

Balance as of September 30, 2022 2,079,315 $ 39.63

SMCI | Q1 2023 Form 10-Q | 27

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The Company recorded a provision for income taxes of $ 16.2 million and $ 27.1 million for the three and nine months ended March 31, 2022, respectively.

The Company recorded a benefit for income taxes of $ 0.2 million for the three months ended March 31, 2021, and a provision for income taxes of $ 8.5 million for the nine months ended March 31, 2021.

The effective tax rate was 17.4 % and 15.9 % for the three and nine months ended March 31, 2022, respectively, and ( 1.2 )% and 10.5 % for the three and nine months ended March 31, 2021, respectively.

The effective tax rate for the three and nine months ended March 31, 2022 is higher than that for the same periods ended March 31, 2021, primarily due to a significant increase in pre-tax income in fiscal 2022 and corresponding decreases in the effective tax rate benefits from R&D credits, deductions for foreign sales, and windfall tax benefits.

As of March 31, 2022, the Company had gross unrecognized tax benefits of $ 38.9 million, of which, $ 15.7 million if recognized, would affect the Company's effective tax rate.

The Company recorded a provision for income taxes of $ 38.9 million and $ 3.3 million for the three months ended September 30, 2022 and 2021, respectively.

The effective tax rate was 17.4 % and 11.7 % for the three months ended September 30, 2022 and 2021, respectively.

The effective tax rate for the three months ended September 30, 2022 is higher than that for the three months ended September 30, 2021, primarily due to significant increase in taxable income in the first quarter of fiscal year 2023, whereas the income tax deduction items such as R&D credit and foreign tax deduction comparably did not increase in the same proportion.

The Tax Cuts and Jobs Act of 2017 eliminated the option to deduct research and development (“R&D”) expenses in the year incurred and instead requires taxpayers to capitalize R&D expenses, including software development cost, and subsequently amortize such expenses over five years for R&D activities conducted in the United States and over fifteen years for R&D activities conducted outside of the United States beginning in the Company’s fiscal year 2023.

Although Congress has considered legislation that would defer, modify, or repeal the capitalization and amortization requirement, there is no assurance the provision will be deferred, repealed, or otherwise modified.

As of September 30, 2022, the Company had gross unrecognized tax benefits of $ 41.7 million, of which, $ 23.9 million if recognized, would affect the Company's effective tax rate.

During the three months ended September 30, 2022, there was a $ 3.7 million increase in gross unrecognized tax benefits.

The Company's policy is to include interest and penalties related to unrecognized tax benefits within the provision for taxes on the condensed consolidated statements of operations.

As of March 31, 2022, the Company had accrued $ 3.1 million of interest and penalties relating to unrecognized tax benefits.

Under the 2017 Tax Reform Act, starting on July 1, 2018, the Company is no longer subject to federal income tax on earnings remitted from its foreign subsidiaries.

As a result of the 2017 Tax Reform Act, the Company has determined that its foreign undistributed earnings are indefinitely reinvested except for undistributed earnings related to the Company's operations in the Netherlands.

The Company may repatriate certain foreign earnings from the Netherlands that have been previously taxed in the U.S.

The tax impact of such repatriation is estimated to be immaterial.

As of September 30, 2022, the Company had accrued $ 3.2 million of interest and penalties relating to unrecognized tax benefits.

The Company believes that it has adequately provided reserves for all uncertain tax positions;

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These adjustments, if recognized, would positively impact the Company's effective tax rate, and would be recognized as additional tax benefits.

SMCI | Q1 2023 Form 10-Q | 28

SUPER MICRO COMPUTER, INC.

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District Court for the Northern District of California (Hessefort v.

Super Micro Computer, Inc., et al.

Super Micro Computer, Inc., et al., No.

18-cv-00838 and United Union of Roofers v.

Super Micro Computer, Inc., et al.

Super Micro Computer, Inc., et al., No.

18-cv-00850).

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The Court denied the motions to dismiss the Section 10(b) and Section 20 claims against the Company, Charles Liang, and Howard Hideshima, the Company’s former CFO.

On March 11, 2022, the Company, together with the individual defendants, entered into an agreement in principle with plaintiff’s counsel to settle the action.

On April 8, 2022, the parties entered into a stipulation of settlement with plaintiff's counsel.

Pursuant to the terms of the stipulation of settlement, and subject to Court approval, plaintiff will dismiss with prejudice and release on behalf of a class of shareholders all claims against defendants, including the Company, in exchange for payment of $ 18,250,000 , of which sum $ 2,000,000 will be funded by the Company.

This settlement, if approved by the Court, will fully resolve the action.

A hearing on preliminary approval of the proposed settlement is scheduled for June 2, 2022.

As of March 31, 2022, the Company recorded a liability of $ 18,250,000 for the Hessefort case settlement in accrued liabilities and $ 16,250,000 of litigation settlement costs recovery in other receivables in its condensed consolidated balance sheets.

The net Hessefort litigation settlement costs of $ 2,000,000 is recorded as a charge to general and administrative expense in the Company's condensed consolidated statement of operations for the three and nine months ended March 31, 2022.

On October 27, 2020, certain current and former directors and officers of the Company were named as defendants in a putative derivative lawsuit filed in the Superior Court of the State of California, County of Santa Clara (the “Court”), captioned Barry v.

Liang, et al., 20-CV-372190.

The Company was also named as a nominal defendant.

The complaint purports to allege claims for breaches of fiduciary duties, waste of corporate assets, and unjust enrichment arising out of allegations that the Company’s officers and directors caused the Company to issue false and misleading statements about recognition of revenue and the effectiveness of its internal controls, failed to adopt and implement effective internal controls, and failed to timely file various reports with the Securities and Exchange Commission.

Defendants filed demurrers, which were set for hearing on August 4, 2021, but which were continued to September 15, 2021.

Following this continuance, on July 21, 2021, Plaintiffs' counsel filed an amended complaint in lieu of responding to the demurrer.

The amended complaint added no new claims;

primarily, the amendment added allegations describing the March 29, 2021 motion to dismiss decision in the Hessefort class action.

Defendants demurred to the amended complaint on August 24, 2021.

Following a March 23, 2022 hearing, on March 25, 2022, the Court granted defendants’ demurrers on the grounds that plaintiffs had failed to allege demand futility and the Court dismissed the amended complaint, but with leave to amend by May 20, 2022.

The case is otherwise currently stayed.

The Company intends to defend the lawsuit vigorously if a second amended complaint is filed.

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

On May 5, 2021, certain current and former directors and officers of the Company were named as defendants in a putative derivative lawsuit filed in the U.S.

District Court for the Northern District of California, captioned Stein v.

Liang, et al ., Case No.

3:21-cv-03357-KAW (the “Stein Derivative Action”).

The Company was also named as a nominal defendant.

The complaint purports to allege claims for breaches of fiduciary duties, waste of corporate assets, unjust enrichment, and contribution for violations of federal securities laws arising out of allegations that the Company’s officers and directors caused the Company to issue false and misleading statements about recognition of revenue and the effectiveness of its internal controls, failed to adopt and implement effective internal controls, and failed to timely file various reports with the Securities and Exchange Commission.

The plaintiff seeks unspecified compensatory damages and other equitable relief.

Defendants filed motions to dismiss the complaint on August 6, 2021.

Rather than oppose defendants’ motions, plaintiff informed defendants that plaintiff was prepared to dismiss his action with prejudice.

On September 29, 2021, the parties submitted a stipulation for dismissal with prejudice as to the named plaintiff to the Court for its approval.

On December 16, 2021, the Court issued an order for the parties to submit within 30 days a plan of notice of dismissal for the Court’s approval.

The Company provided notice as required by the Court on December 21, 2021.

No shareholder sought to intervene during the 45 -day notice period ending on February 4, 2022, and on March 24, 2022, the Court issued an order dismissing the lawsuit with prejudice as to the named plaintiff.

SEC Matter— The Company cooperated with the SEC in its investigation of marketing expenses that contained certain irregularities discovered by Company management, which irregularities were disclosed on August 31, 2015, and the Company cooperated with the SEC in its further investigation of the matters underlying the Company’s inability to timely file its Form 10-K for the fiscal year ended June 30, 2017 and concerning the publication of a false and widely discredited news article in October 2018 concerning the Company’s products.

On August 25, 2020, to fully resolve all matters under investigation, the Company consented to entry of an Order Instituting Cease-and-Desist Proceedings Pursuant to Section 8A of the Securities Act of 1933 and Section 21C of the Securities Exchange Act of 1934, Making Findings, and Imposing a Cease-and-Desist Order (“Order”), as announced by the SEC.

The Company admitted the SEC’s jurisdiction over the Company and the subject matter of the proceedings, but otherwise neither admitted nor denied the SEC’s findings, as described in the Order.

The Company agreed to cease and desist from committing or causing any violations and any future violations of Sections 17(a)(2) and (3) of the Securities Act and Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B), of the Exchange Act and Rules 12b-20, 13a-1, 13a-11, and 13a-13 thereunder.

The Company agreed and paid a civil money penalty of $ 17,500,000 during the three months ended September 30, 2020, which was recorded to general and administrative expense in the Company's condensed consolidated statement of operations in the first quarter of fiscal 2021.

In addition, the Company’s Chief Executive Officer concluded a settlement with the SEC on August 25, 2020, as announced by the SEC.

The Company’s Chief Executive Officer paid the Company the sum of $ 2,122,000 as reimbursement of profits from certain stock sales during the relevant period, pursuant to Section 304 of the Sarbanes-Oxley Act of 2002.

The settlement amount was paid during the first quarter of fiscal 2021 and the Company recorded the payment as a credit to general and administrative expense in the first quarter of fiscal 2021.

On March 11, 2022, the Company, together with the individual defendants, agreed in principle with plaintiff’s counsel to settle the action.

On April 8, 2022, the parties entered into a stipulation of settlement, pursuant to which and subject to Court approval, plaintiff will dismiss with prejudice and release on behalf of a class of shareholders all claims against defendants, including the Company, in exchange for payment of $ 18,250,000 , of which sum $ 2,000,000 will be funded by the Company.

On May 25, 2022, the Court vacated the hearing on preliminary approval of the proposed settlement scheduled for June 2, 2022, stating that the unopposed motion was suitable for disposition without oral argument.

Consequently, the parties expect the Court will grant preliminary approval and calendar a future hearing for final approval.

This settlement, if finally approved by the Court, will fully resolve the action.

Other legal proceedings and indemnifications

From time to time, the Company has been involved in various legal proceedings arising from the normal course of business activities.

The resolution of any such matters have not had a material impact on the Company’s consolidated financial condition, results of operations or liquidity as of March 31, 2022 and any prior periods.

The resolution of any such matters have not had a material impact on the Company’s consolidated financial condition, results of operations or liquidity as of September 30, 2022 and any prior periods.

The Company has entered into indemnification agreements with its current and former directors and executive officers.

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Purchase Commitments — The Company has agreements to purchase inventory and non-inventory items primarily through the next 12 months.

As of March 31, 2022, these remaining noncancelable commitments were $ 628.6 million, including $ 82.8 million for related parties.

As of September 30, 2022, these remaining noncancelable commitments were $ 512.3 million, including $ 97.7 million for related parties.

Lease Commitments - See Part I, Item 1, Note 7, "Leases," for a discussion of the Company's operating lease and financing lease commitments.

SMCI | Q1 2023 Form 10-Q | 29

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Lease Commitments - See Note 7, "Leases," for a discussion of the Company's operating lease and financing lease commitments.

Segment Reporting

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The following is a summary of property, plant and equipment, net (in thousands):

March 31, June 30,

September 30, June 30,

Long-lived assets:

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$ 290,752 $ 285,972

The Company’s revenue is presented on a disaggregated basis in Note 2, “Revenue,” by type of product and by geographical market.

The Company’s revenue is presented on a disaggregated basis in Part I, Item 1, Note 2, “Revenue,” by type of product and by geographical market.

SMCI | Q1 2023 Form 10-Q | 30

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements