What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-02-02 compared with 2023-11-03 · 321 added, 179 removed, 565 unchanged (47% of the section changed)

3 unchanged sentences

(in thousands, except par value per share amounts)

September 30, June 30,

December 31, June 30,

Current assets:

Cash and cash equivalents $ 725,660 $ 440,459

Accounts receivable, net of allowance for credit losses of $ 79 and $ 82 at September 30, 2023 and June 30, 2023, respectively (including accounts receivable from related parties of $ 1,335 and $ 5,473 at September 30, 2023 and June 30, 2023, respectively)

Accounts receivable, net of allowance for credit losses of $ 77 and $ 82 at December 31, 2023 and June 30, 2023, respectively (including accounts receivable from related parties of $ 3,859 and $ 5,473 at December 31, 2023 and June 30, 2023, respectively)

1,502,971 1,148,259

Inventories 2,466,997 1,445,564

Prepaid expenses and other current assets (including receivables from related parties of $ 24,905 and $ 27,732 at September 30, 2023 and June 30, 2023, respectively)

Prepaid expenses and other current assets (including receivables from related parties of $ 34,293 and $ 27,732 at December 31, 2023 and June 30, 2023, respectively)

146,727 145,144

6 unchanged sentences

Current liabilities:

Accounts payable (including amounts due to related parties of $ 92,115 and $ 89,134 at September 30, 2023 and June 30, 2023, respectively)

Accounts payable (including amounts due to related parties of $ 101,700 and $ 89,134 at December 31, 2023 and June 30, 2023, respectively)

$ 1,261,533 $ 776,831

Accrued liabilities (including amounts due to related parties of $ 16,504 and $ 14,017 at September 30, 2023 and June 30, 2023, respectively)

Accrued liabilities (including amounts due to related parties of $ 18,509 and $ 14,017 at December 31, 2023 and June 30, 2023, respectively)

214,462 163,865

12 unchanged sentences

Issued and outstanding shares:

53,295 and 52,901 at September 30, 2023 and June 30, 2023, respectively

55,917 and 52,901 at December 31, 2023 and June 30, 2023, respectively

1,190,276 538,352

12 unchanged sentences

Three Months Ended

September 30,

Net sales (including related party sales of $ 17,396 and $ 25,055 in the three months ended September 30, 2023 and 2022, respectively)

December 31, Six Months Ended

2023 2022 2023 2022

Cost of sales (including related party purchases of $ 113,107 and $ 96,536 in the three months ended September 30, 2023 and 2022, respectively)

Net sales (including related party sales of $ 15,781 and $ 20,073 in the three months ended December 31, 2023 and 2022, respectively, and $ 33,177 and $ 45,126 in the six months ended December 31, 2023 and 2022, respectively)

$ 3,664,924 $ 1,803,195 $ 5,784,596 $ 3,655,325

Cost of sales (including related party purchases of $ 112,445 and $ 98,743 in the three months ended December 31, 2023 and 2022, respectively, and $ 225,552 and $ 195,279 in the six months ended December 31, 2023 and 2022, respectively)

3,100,602 1,465,773 4,866,583 2,970,368

Gross profit 564,322 337,422 918,013 684,957

5 unchanged sentences

Income from operations 371,464 215,182 543,974 435,305

Other income, net

Other (expense) income, net

( 7,886 ) ( 6,335 ) ( 1,273 ) 1,719

Interest expense ( 8,131 ) ( 1,756 ) ( 9,994 ) ( 5,694 )

1 unchanged sentence

Income tax provision ( 61,503 ) ( 29,573 ) ( 81,718 ) ( 68,507 )

Share of loss from equity investee, net of taxes

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

2,024 ( 1,351 ) 1,974 ( 2,240 )

12 unchanged sentences

Three Months Ended

September 30,

December 31, Six Months Ended

2023 2022 2023 2022

Net income $ 295,968 $ 176,167 $ 452,963 $ 360,583

8 unchanged sentences

(in thousands, except share amounts)

Three Months Ended September 30, 2023 Common Stock and

Three Months Ended December 31, 2023 Common Stock and

Additional Paid-In

4 unchanged sentences

Shares Amount

Balance at June 30, 2023 52,901,358 $ 538,352 $ 639 $ 1,433,014 $ 165 $ 1,972,170

Balance at September 30, 2023 53,294,998 $ 574,718 $ 651 $ 1,590,009 $ 161 $ 2,165,539

Exercise of stock options, net of taxes 152,452 5,287 — — — 5,287

1 unchanged sentence

Shares withheld for the withholding tax on vesting of restricted stock units ( 58,617 ) ( 15,594 ) — — — ( 15,594 )

Issuance of common stock in a public offering, net of issuance costs

2,315,105 582,804 — — — 582,804

Stock-based compensation — 43,061 — — — 43,061

1 unchanged sentence

Net income — — — 295,968 3 295,971

Balance at December 31, 2023 55,917,304 $ 1,190,276 $ 657 $ 1,885,977 $ 164 $ 3,077,074

Three Months Ended December 31, 2022

Common Stock and

Additional Paid-In

Capital Accumulated

Comprehensive Income

Earnings Non-controlling Interest Total

Stockholders’

Shares Amount

Balance at September 30, 2022

Three Months Ended September 30, 2022

52,851,469 $ 497,183 $ 514 $ 1,127,339 $ 167 $ 1,625,203

Exercise of stock options, net of taxes 347,666 7,183 — — — 7,183

Release of common stock shares upon vesting of restricted stock units 290,471 — — — — —

Shares withheld for the withholding tax on vesting of restricted stock units ( 89,305 ) ( 6,788 ) — — — ( 6,788 )

Stock-based compensation — 16,981 — — — 16,981

Other comprehensive income

— — 98 — — 98

Net income (loss) — — — 176,167 ( 2 ) 176,165

Balance at December 31, 2022

53,400,301 $ 514,559 $ 612 $ 1,303,506 $ 165 $ 1,818,842

SMCI | Q2 2024 Form 10-Q | 4

Six Months Ended December 31, 2023

Common Stock and

1 unchanged sentence

Capital Accumulated

Comprehensive Income Retained

Earnings Non-controlling Interest Total

Stockholders’

Shares Amount

Balance at June 30, 2023

52,901,358 $ 538,352 $ 639 $ 1,433,014 $ 165 $ 1,972,170

Exercise of stock options, net of taxes 341,409 9,574 — — — 9,574

Release of common stock shares upon vesting of restricted stock units 511,022 — — — — —

Shares withheld for the withholding tax on vesting of restricted stock units ( 151,590 ) ( 40,894 ) — — — ( 40,894 )

Issuance of common stock in a public offering, net of issuance costs

2,315,105 582,804 — — — 582,804

Stock-based compensation — 100,440 — — — 100,440

Other comprehensive income — — 18 — — 18

Net income (loss)

— — — 452,963 ( 1 ) 452,962

Balance at December 31, 2023

55,917,304 $ 1,190,276 $ 657 $ 1,885,977 $ 164 $ 3,077,074

Six Months Ended December 31, 2022

Common Stock and

Additional Paid-In

Capital Accumulated

Comprehensive Income (Loss)

10 unchanged sentences

Net income (loss) — — — 360,583 ( 7 ) 360,576

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

Balance at December 31, 2022

53,400,301 $ 514,559 $ 612 $ 1,303,506 $ 165 $ 1,818,842

See accompanying notes to condensed consolidated financial statements.

3 unchanged sentences

(in thousands)

Three Months Ended

September 30,

Six Months Ended

OPERATING ACTIVITIES:

Net income $ 452,963 $ 360,583

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

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

Depreciation and amortization 18,775 17,196

Stock-based compensation expense 100,440 27,995

Share of loss from equity investee

Foreign currency exchange gain

Share of (income) loss from equity investee

( 1,974 ) 2,240

Foreign currency exchange loss (gain)

5,680 ( 4,614 )

Deferred income taxes, net ( 55,620 ) ( 25,812 )

1 unchanged sentence

Changes in operating assets and liabilities:

Accounts receivable, net (including changes in related party balances of $ 4,138 and $( 1,851 ) during the three months ended September 30, 2023 and 2022, respectively)

Accounts receivable, net (including changes in related party balances of $ 1,614 and $ 3,178 during the six months ended December 31, 2023 and 2022, respectively)

( 354,685 ) 68,036

Inventories ( 1,021,433 ) 123,789

Prepaid expenses and other assets (including changes in related party balances of $ 2,827 and $( 10,139 ) during the three months ended September 30, 2023 and 2022, respectively)

19,990 ( 11,991 )

Accounts payable (including changes in related party balances of $ 2,981 and $ 6,674 during the three months ended September 30, 2023 and 2022, respectively)

Prepaid expenses and other assets (including changes in related party balances of $( 6,561 ) and $( 22,925 ) during the six months ended December 31, 2023 and 2022, respectively)

Accounts payable (including changes in related party balances of $ 12,566 and $ 751 during the six months ended December 31, 2023 and 2022, respectively)

479,613 ( 90,908 )

Income taxes payable ( 82,713 ) ( 3,030 )

Accrued liabilities (including changes in related party balances of $ 2,487 and $ 9,585 during the three months ended September 30, 2023 and 2022, respectively)

Deferred revenue 36,055 85,989

Other long-term liabilities (including changes in related party balances of $( 80 ) and $( 105 ) during the three months ended September 30, 2023 and 2022, respectively)

Accrued liabilities (including changes in related party balances of $ 4,492 and $ 851 during the six months ended December 31, 2023 and 2022, respectively)

48,979 ( 44,092 )

Net cash provided by operating activities

Deferred revenue 79,228 46,243

Other long-term liabilities (including changes in related party balances of $( 152 ) and $( 168 ) during the six months ended December 31, 2023 and 2022, respectively)

Net cash (used in) provided by operating activities

( 324,620 ) 474,674

INVESTING ACTIVITIES:

Purchases of property, plant and equipment (including payments to related parties of $ 826 and $ 729 during the three months ended September 30, 2023 and 2022, respectively)

Purchases of property, plant and equipment (including payments to related parties of $ 4,528 and $ 4,514 during the six months ended December 31, 2023 and 2022, respectively)

( 17,351 ) ( 20,631 )

Investment in marketable securities

Investment in equity securities

Net cash used in investing activities

5 unchanged sentences

Payment of withholding tax on vesting of restricted stock units ( 40,894 ) ( 10,504 )

Issuance of common stock in a public offering, net of issuance costs

Other 14 ( 19 )

Net cash used in financing activities

Net cash provided by (used in) financing activities

632,194 ( 415,821 )

Effect of exchange rate fluctuations on cash 170 ( 1,693 )

Net increase (decrease) in cash, cash equivalents and restricted cash

Net increase in cash, cash equivalents and restricted cash

285,209 36,529

6 unchanged sentences

Non-cash investing and financing activities:

Unpaid property, plant and equipment purchases (including due to related parties of $ 3,672 and $ 3,782 as of September 30, 2023 and 2022, respectively)

Unpaid property, plant and equipment purchases (including due to related parties of $ 2,577 and $ 1,764 as of December 31, 2023 and 2022, respectively)

$ 6,163 $ 3,333

13 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 months ended September 30, 2023 are not necessarily indicative of the results that may be expected for future quarters or for the fiscal year ending June 30, 2024.

The consolidated results of operations for the three and six months ended December 31, 2023 are not necessarily indicative of the results that may be expected for future quarters or for the fiscal year ending June 30, 2024.

Certain prior year amounts within cash from operating activities in the condensed consolidated statements of cash flows have been reclassified to conform to current year presentation.

3 unchanged sentences

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

Two suppliers accounted for 55.1 % and 10.3 % of total purchases for the three months ended September 30, 2023, and the same two suppliers accounted for 25.7 % and 16.1 % of total purchases for the three months ended September 30, 2022.

The increase in concentration of total purchases to one of the Company's suppliers to 55.1 % of total purchases for the three months ended September 30, 2023 is as a result of the purchase of GPUs to build its solutions for the Company's customers.

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 % of total cost of sales for both the three months ended September 30, 2023 and 2022.

Two suppliers accounted for 68.1 % and 7.3 % of total purchases for the three months ended December 31, 2023, and the same two suppliers accounted for 17.6 % and 14.1 % of total purchases for the three months ended December 31, 2022.

Two suppliers accounted for 62.9 % and 8.6 % of total purchases for the six months ended December 31, 2023, and the same two suppliers accounted for 22.3 % and 15.3 % of total purchases for the six months ended December 31, 2022.

The increase in concentration of total purchases to one of the Company's suppliers to 68.1 % and 62.9 % of total purchases for the three and six months ended December 31, 2023, respectively, is as a result of the purchase of key components to build its solutions for the Company's customers.

Purchases from Ablecom, and Compuware, related parties of the Company (see Part I, Item 1, Note 8, "Related Party Transactions") accounted for a combined 3.6 % and 6.7 % of total cost of sales for the three months ended December 31, 2023 and 2022, respectively, and a combined 4.6 % and 6.6 % of total cost of sales for the six months ended December 31, 2023 and 2022, respectively.

Concentration of Credit and Customer Risk

Financial instruments which potentially subject the Company to concentration of credit risk consist primarily of cash and cash equivalents, restricted cash and accounts receivable.

Three customers accounted for 15.7 %, 14.5 % and 10.3 % of accounts receivable, net as of September 30, 2023.

Four customers accounted for 26.7 %, 16.3 %, 13.0 % and 11.3 % of accounts receivable, net as of December 31, 2023.

Two customers accounted for 22.9 % and 19.3 % of accounts receivable, net as of June 30, 2023.

These accounts receivable represent a concentration of credit risk to the Company.

One customer accounted for 25.0 % of the net sales for the three months ended September 30, 2023.

One customer accounted for 21.9 % of the net sales for the three months ended September 30, 2022.

SMCI | Q2 2024 Form 10-Q | 8

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Two customers accounted for 25.5 % and 10.4 % of the net sales for the three months ended December 31, 2023 and o ne customer accounted for 25.3 % of the net sales for the six months ended December 31, 2023.

No single customer accounted for 10% or more of the net sales for the three months ended December 31, 2022 , and one customer accounted for 15.8 % of the net sales for the six months ended December 31, 2022 .

Accounting Pronouncements Not Yet Adopted

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures.

This ASU requires that a public entity provide additional segment disclosures on an interim and annual basis.

The amendments in this ASU should be applied retrospectively to all prior periods presented in the financial statements unless impracticable.

Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption.

The ASU is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The Company is currently evaluating this guidance and the impact it may have on its financial statement disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction.

The amendments are effective for the Company’s annual periods beginning July 1, 2025, with early adoption permitted, and should be applied either prospectively or retrospectively.

The Company is currently evaluating this guidance and the impact it may have on its financial statement disclosures.

Disaggregation of Revenue

3 unchanged sentences

Three Months Ended

September 30,

December 31, Six Months Ended

2023 2022 2023 2022

Server and storage systems $ 3,435,562 $ 1,660,931 $ 5,402,170 $ 3,373,987

3 unchanged sentences

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

SMCI | Q2 2024 Form 10-Q | 9

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

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 months ended September 30, 2023 and 2022, of net sales by geographic region (in thousands):

The following is a summary for the three and six months ended December 31, 2023 and 2022, of net sales by geographic region (in thousands):

Three Months Ended

September 30,

December 31, Six Months Ended

2023 2022 2023 2022

United States $ 2,605,585 $ 1,091,391 $ 4,225,099 $ 2,386,895

12 unchanged sentences

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 months ended September 30, 2023, which was included in the opening deferred revenue balance as of June 30, 2023, of $ 304.4 million, was $ 43.7 million.

SMCI | Q1 2024 Form 10-Q | 8

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Deferred revenue increased $ 36.1 million as of September 30, 2023 as compared to the fiscal year ended June 30, 2023.

Revenue recognized during the three and six months ended December 31, 2023, which was included in the opening deferred revenue balance as of June 30, 2023, of $ 304.4 million, was $ 31.5 million and $ 75.2 million, respectively.

Deferred revenue increased $ 79.2 million as of December 31, 2023 as compared to the fiscal year ended June 30, 2023.

This increase was mainly due to a $ 44.3 million 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.

3 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 September 30, 2023 was approximately $ 340.5 million .

The value of the transaction price allocated to remaining performance obligations as of December 31, 2023 was approximately $ 383.6 million .

The Company expects to recognize approximately 50 % of remaining performance obligations as revenue in the next 12 months, and the remainder thereafter.

SMCI | Q2 2024 Form 10-Q | 10

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Capitalized Contract Acquisition Costs and Fulfillment Cost

8 unchanged sentences

Such fulfillment costs are insignificant to the Company’s condensed consolidated financial statements.

SMCI | Q1 2024 Form 10-Q | 9

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Net Income Per Common Share

The following table shows the computation of basic and diluted net income per common share for the three months ended September 30, 2023 and 2022 (in thousands, except per share amounts):

The following table shows the computation of basic and diluted net income per common share for the three and six months ended December 31, 2023 and 2022 (in thousands, except per share amounts):

Three Months Ended

September 30,

December 31, Six Months Ended

2023 2022 2023 2022

Net income $ 295,968 $ 176,167 $ 452,963 $ 360,583

4 unchanged sentences

Diluted net income per common share $ 5.10 $ 3.14 $ 7.86 $ 6.51

For the three months ended September 30, 2023 and 2022, 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 337,730 and 307,395 for the three months ended September 30, 2023 and 2022, respectively.

For the three and six months ended December 31, 2023 and 2022, the Company had stock options and restricted stock units ("RSUs") 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 584,855 and 211,729 for the three months ended December 31, 2023 and 2022, respectively, and 461,292 and 259,562 for the six months ended December 31, 2023 and 2022, respectively.

SMCI | Q2 2024 Form 10-Q | 11

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Balance Sheet Components

1 unchanged sentence

Cash, Cash Equivalents and Restricted Cash:

September 30, 2023 June 30, 2023

December 31, 2023 June 30, 2023

Cash and cash equivalents $ 725,660 $ 440,459

1 unchanged sentence

Total cash, cash equivalents and restricted cash $ 726,169 $ 440,960

September 30, 2023 June 30, 2023

December 31, 2023 June 30, 2023

Finished goods $ 1,566,278 $ 1,045,177

2 unchanged sentences

Total inventories $ 2,466,997 $ 1,445,564

SMCI | Q1 2024 Form 10-Q | 10

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Property, Plant, and Equipment:

September 30, 2023 June 30, 2023

December 31, 2023 June 30, 2023

Buildings $ 143,496 $ 143,496

8 unchanged sentences

Property, plant and equipment, net $ 297,102 $ 290,240

SMCI | Q2 2024 Form 10-Q | 12

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Accrued Liabilities:

September 30, 2023 June 30, 2023

December 31, 2023 June 30, 2023

Accrued payroll and related expenses $ 64,237 $ 53,439

Contract manufacturers liabilities 23,741 23,634

Customer deposits 35,965 16,577

Contract manufacturers liabilities 24,565 23,634

Accrued cooperative marketing expenses 12,153 9,744

6 unchanged sentences

Three Months Ended

September 30,

December 31, Six Months Ended

2023 2022 2023 2022

Balance, beginning of the period $ 15,629 $ 12,703 $ 14,859 $ 12,136

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 2024 Form 10-Q | 11

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 September 30, 2023 and June 30, 2023.

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.

SMCI | Q2 2024 Form 10-Q | 13

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Financial Assets and Liabilities Measured on a Recurring Basis

The following table sets forth the Company’s financial instruments as of September 30, 2023 and June 30, 2023, 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 December 31, 2023 and June 30, 2023, 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):

September 30, 2023 Level 1 Level 2 Level 3 Asset at

December 31, 2023 Level 1 Level 2 Level 3 Asset at

Money market funds (1)

1 unchanged sentence

Certificates of deposit (2)

Investment in marketable equity security

4,176 — — 4,176

Investment in marketable securities 3,866 — — 3,866

Auction rate security — — 1,843 1,843

6 unchanged sentences

Total assets measured at fair value $ 20,823 $ 462 $ 1,843 $ 23,128

(1) $ 20.9 million and $ 20.6 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, 2023 and June 30, 2023, respectively.

(2) $ 126.7 million and $ 0.2 million in certificates of deposit are included in cash and cash equivalents, $ 0.1 million and $ 0.1 million in certificates of deposit are included in prepaid expenses and other assets, and $ 0.2 million and $ 0.2 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, 2023 and June 30, 2023, respectively.

(1) $ 0.1 million and $ 20.6 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 December 31, 2023 and June 30, 2023, respectively.

(2) $ 0.2 million and $ 0.2 million in certificates of deposit are included in cash and cash equivalents, $ 0.1 million and $ 0.1 million in certificates of deposit are included in prepaid expenses and other assets, and $ 0.2 million and $ 0.2 million in certificates of deposit are included in restricted cash, non-current in other assets in the condensed consolidated balance sheets as of December 31, 2023 and June 30, 2023, respectively.

The carrying amounts reported in the condensed consolidated balance sheets for cash and cash equivalents, accounts receivable, other assets, accounts payable and accrued liabilities approximate their fair values.

The investment in marketable securities is carried at fair value using values available on a public exchange and is based on a Level 1 input.

The investment is accounted for as an equity security, with unrealized gains and losses included in earnings.

Unrealized loss of $ 1.1 million has been recorded in Other income, net in the condensed consolidated statement of operations for the three months ended September 30, 2023.

The investment in marketable equity security is carried at fair value using values available on a public exchange and is based on a Level 1 input.

The unrealized gains and losses of the investment is included in earnings.

The condensed consolidated statement of operations for the three and six months ended December 31, 2023, includes an unrealized gain of $ 0.3 million and a loss of $ 0.8 million, respectively, which have been recorded in Other income, net.

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 months ended September 30, 2023, the credit losses related to the Company’s investments were not material.

For the three and six months ended December 31, 2023, the credit losses related to the Company’s investments were not material.

There was immaterial 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 six months ended December 31, 2023 and 2022.

There were no transfers between Level 1, Level 2 or Level 3 financial instruments in the three and six months ended December 31, 2023 and 2022.

SMCI | Q2 2024 Form 10-Q | 14

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

There were no transfers between Level 1, Level 2 or Level 3 financial instruments in the three months ended September 30, 2023 and 2022.

The following is a summary of the Company’s investment in an auction rate security as of September 30, 2023 and June 30, 2023 (in thousands):

The following is a summary of the Company’s investment in an auction rate security as of December 31, 2023 and June 30, 2023 (in thousands):

Cost Basis Gross

1 unchanged sentence

Auction rate security $ 1,750 $ 287 $ ( 194 ) $ 1,843

No gain or loss was recognized in other comprehensive income for the auction rate security for the three months ended September 30, 2023 and 2022.

No gain or loss was recognized in other comprehensive income for the auction rate security for the three and six months ended December 31, 2023 and 2022.

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

As of September 30, 2023 and June 30, 2023, total debt of $ 146.2 million and $ 290.3 million, respectively, was reported at amortized cost.

As of December 31, 2023 and June 30, 2023, total debt of $ 375.6 million and $ 290.3 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 $ 0.1 million and $ 1.7 million as of September 30, 2023 and June 30, 2023, respectively.

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 months ended September 30, 2023, the Company performed a qualitative assessment and identified impairment indicators.

The Company recorded a $ 1.6 million impairment during the three months ended September 30, 2023 in Other income, net on the condensed consolidated statement of operations.

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

During the three and six months ended December 31, 2023, the Company performed a qualitative assessment and identified impairment indicators.

The Company recorded a $ 0.2 million and $ 1.8 million impairment during the three and six months ended December 31, 2023, respectively, in Other income, net on the condensed consolidated statement of operations.

The Company did not have any impairment to the carrying values of the non-marketable equity securities during the three and six months ended December 31, 2022.

SMCI | Q2 2024 Form 10-Q | 15

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Short-term and Long-term Debt

Short-term and long-term debt obligations as of September 30, 2023 and June 30, 2023 consisted of the following (in thousands):

September 30, June 30,

Short-term and long-term debt obligations as of December 31, 2023 and June 30, 2023 consisted of the following (in thousands):

December 31, June 30,

Line of credit:

22 unchanged sentences

Activities under Revolving Lines of Credit and Term Loans

Available borrowings and interest rates as of September 30, 2023 and June 30, 2023 consisted of the following (in thousands except for percentages):

September 30, 2023

Available borrowings and interest rates as of December 31, 2023 and June 30, 2023 consisted of the following (in thousands except for percentages):

December 31, 2023

June 30, 2023

10 unchanged sentences

HSBC Bank Credit Facility $ 20,296 1.90 % - 6.37 %

$ 50,000 4.50 %

2022 E.SUN Bank Credit Facility $ 30,000 6.67 % $ 30,000 4.18 %

13 unchanged sentences

Short-term and Long-term Debt” of the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2023 for a more complete description of the Company's credit facilities.

The Company entered into a new General Credit Agreement with CTBC Bank during the three months ended September 30, 2023 with the following terms:

The Company entered into new agreements during the six months ended December 31, 2023 with the following terms:

2023 CTBC Bank Credit Lines

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The Company's Taiwan subsidiary intends to use borrowings under the New CTBC Credit Lines in connection with financing of eligible accounts receivable and accounts payable (vendor invoices) and to finance additional improvements to the Company’s Bade Manufacturing Facility located in Taiwan.

As of December 31, 2023, the outstanding borrowings under the 2023 CTBC Bank Credit Lines were $ 36.9 million.

The interest rate for these loans were 1.96 % - 6.52 % per annum as of December 31, 2023.

2023 HSBC Bank Credit Lines

On December 7, 2023, the Company's Taiwan subsidiary entered into a new Facility Letter with the Taiwan affiliate of HSBC Bank.

The New Facility Letter is substantially identical to the prior Facility Letter entered into with HSBC Bank on February 7, 2023.

The New Facility Letter permits borrowings up to a combined aggregate limit of $ 50 million which may be comprised of borrowings under a New Taiwan Dollar revolving facility with a sub-limit of NTD 300 million (the “NTD Revolver”) and an export/seller facility with a sub-limit of $ 50 million (the “Export/Seller Facility”, and together with the NTD Revolver, the "HSBC Bank Credit Lines").

Interest under both the NTD Revolver and Export/Seller Facility is based on HSBC Bank’s base rate plus a fixed margin, subject to adjustment under certain circumstances.

Interest payments thereunder are due on a monthly basis, or such other interest period as agreed by HSBC Bank, and principal is repayable on the due date.

Amounts due under the New Facility Letter are currently not secured, but subject to HSBC Bank’s right of set-off and right to repayment on demand and call for cash coverage.

As of December 31, 2023, the outstanding borrowings under HSBC Bank Credit Lines were $ 29.7 million.

The interest rates for these loans were 1.90 % - 6.37 % per annum as of December 31, 2023.

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

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

SMCI | Q2 2024 Form 10-Q | 18

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

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 months ended September 30, 2023 and 2022 were as follows (in thousands):

Operating lease expense recognized and supplemental cash flow information related to operating leases for the three and six months ended December 31, 2023 and 2022 were as follows (in thousands):

Three Months Ended

September 30,

Operating lease expense (including expense for lease agreements with related parties of $ 139 and $ 143 for the three months ended September 30, 2023 and 2022, respectively)

Six Months Ended

2023 2022 2023 2022

Cash payments for operating leases (including payments to related parties of $ 128 and $ 130 for the three months ended September 30, 2023 and 2022, respectively)

Operating lease expense (including expense for lease agreements with related parties of $ 139 and $ 140 for the three months ended December 31, 2023 and 2022, respectively, and $ 277 and $ 284 for the six months ended December 31, 2023 and 2022, respectively)

$ 2,354 $ 2,115 $ 4,539 $ 4,225

Cash payments for operating leases (including payments to related parties of $ 129 and $ 127 for the three months ended December 31, 2023 and 2022, respectively, and $ 257 and $ 257 for the six months ended December 31, 2023 and 2022, respectively)

$ 2,204 $ 2,025 $ 4,287 $ 4,063

New operating lease assets obtained in exchange for operating lease liabilities $ 572 $ 274 $ 9,749 $ 1,024

During the three months ended September 30, 2023 and 2022, 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, 2023 and 2022 were immaterial.

SMCI | Q1 2024 Form 10-Q | 16

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

As of September 30, 2023, the weighted average remaining lease term for operating leases was 3.5 years and the weighted average discount rate was 4.1 %.

Maturities of operating lease liabilities under noncancelable operating lease arrangements as of September 30, 2023 were as follows (in thousands):

During the three and six months ended December 31, 2023 and 2022, 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 and six months ended December 31, 2023 were $ 0.5 million and $ 0.9 million, respectively.

Non-lease variable payments expensed in the three and six months ended December 31, 2022 were $ 0.4 million and $ 0.9 million, respectively.

As of December 31, 2023, the weighted average remaining lease term for operating leases was 3.1 years and the weighted average discount rate was 4.2 %.

Maturities of operating lease liabilities under noncancelable operating lease arrangements as of December 31, 2023 were as follows (in thousands):

Maturities of operating leases

6 unchanged sentences

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

SMCI | Q2 2024 Form 10-Q | 19

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Related Party Transactions

4 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 36.0 % 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 September 30, 2023.

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

2 unchanged sentences

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.

In addition, a sibling of Yih-Shyan (Wally) Liaw, who is our Senior Vice President, Business Development and a director, owns approximately 11.7 % of Ablecom’s capital stock and 8.7 % of Compuware’s capital stock.

Dealings with Ablecom

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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 85.5 % and 88.4 % of the chassis included in the products sold by the Company during the three months ended September 30, 2023 and 2022, respectively.

Ablecom manufactured approximately 87.2 % and 95.5 % of the chassis included in the products sold by the Company during the three months ended December 31, 2023 and 2022, respectively, and 86.3 % and 91.8 % of the chassis included in the products sold by the Company during the six months ended December 31, 2023 and 2022, 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.

1 unchanged sentence

The Company retains full ownership of any intellectual property resulting from the design of these products and tooling.

SMCI | Q1 2024 Form 10-Q | 17

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

With respect to the manufacturing aspects of the relationship, Ablecom purchases most of materials needed to manufacture the chassis from third parties and the Company provides certain components used in the manufacturing process (such as power supplies) to Ablecom through consignment or sales transactions.

4 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 September 30, 2023 were $ 49.5 million and $ 27.7 million, respectively, and outstanding cancellable and non-cancellable purchase orders from the Company to Ablecom on June 30, 2023 were $ 37.4 million and $ 23.7 million, respectively, effectively representing the exposure to financial loss.

Outstanding cancellable and non-cancellable purchase orders from the Company to Ablecom on December 31, 2023 were $ 49.1 million and $ 37.5 million, respectively, and outstanding cancellable and non-cancellable purchase orders from the Company to Ablecom on June 30, 2023 were $ 37.4 million and $ 23.7 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.

SMCI | Q2 2024 Form 10-Q | 20

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Dealings with Compuware

13 unchanged sentences

In addition to the inventory purchases, the Company also incurs costs associated with design services, tooling assets, and miscellaneous costs.

SMCI | Q1 2024 Form 10-Q | 18

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

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 September 30, 2023 were $ 138.2 million and $ 38.8 million, respectively, and outstanding cancellable and non-cancellable purchase orders from the Company to Compuware on June 30, 2023 were $ 156.2 million and $ 46.8 million, respectively, effectively representing the exposure to financial loss.

Outstanding cancellable and non-cancellable purchase orders from the Company to Compuware on December 31, 2023 were $ 121.6 million and $ 49.9 million, respectively, and outstanding cancellable and non-cancellable purchase orders from the Company to Compuware on June 30, 2023 were $ 156.2 million and $ 46.8 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.

There was no balance in the deferred gain in the consolidated balance sheets as of September 30, 2023 and June 30, 2023.

There was no balance in the deferred gain in the consolidated balance sheets as of December 31, 2023 and June 30, 2023.

SMCI | Q2 2024 Form 10-Q | 21

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

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.

3 unchanged sentences

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 September 30, 2023.

No impairment charge was recorded for the three months ended September 30, 2023 or 2022.

The Company sold products worth $ 0.8 million and $ 11.3 million to the Corporate Venture during the three months ended September 30, 2023 and 2022, respectively.

The Company’s share of intra-entity profits on the products that remained unsold by the Corporate Venture as of September 30, 2023 and June 30, 2023 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 December 31, 2023.

No impairment charge was recorded for the three and six months ended December 31, 2023 or 2022.

The Company sold products worth $ 11.4 million and $ 6.0 million to the Corporate Venture during the three months ended December 31, 2023 and 2022, respectively, and $ 12.2 million and $ 17.3 million to the Corporate Venture during the six months ended December 31, 2023 and 2022, respectively.

The Company’s share of intra-entity profits on the products that remained unsold by the Corporate Venture as of December 31, 2023 and June 30, 2023 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.

The Company had $ 0.2 million and $ 1.9 million due from the Corporate Venture in accounts receivable, net as of September 30, 2023 and June 30, 2023, respectively.

SMCI | Q1 2024 Form 10-Q | 19

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The Company had the following balances related to transactions with its related parties as of September 30, 2023 and June 30, 2023 (in thousands):

The Company had $ 3.5 million and $ 1.9 million due from the Corporate Venture in accounts receivable, net as of December 31, 2023 and June 30, 2023, respectively.

The Company had the following balances related to transactions with its related parties as of December 31, 2023 and June 30, 2023 (in thousands):

Ablecom Compuware Corporate Venture Total

September 30, 2023 June 30, 2023 September 30, 2023 June 30, 2023 September 30, 2023 June 30, 2023 September 30, 2023 June 30, 2023

December 31, 2023 June 30, 2023 December 31, 2023 June 30, 2023 December 31, 2023 June 30, 2023 December 31, 2023 June 30, 2023

Accounts receivable $ 2 $ 2 $ 289 $ 3,528 $ 3,568 $ 1,943 $ 3,859 $ 5,473

6 unchanged sentences

(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 September 30, 2023 and 2022, are as follows (in thousands):

The Company’s results from transactions with its related parties for each of the three months ended December 31, 2023 and 2022, are as follows (in thousands):

Ablecom Compuware Corporate Venture Total

Three months ended September 30,

Three months ended December 31, Three months ended December 31, Three months ended December 31, Three months ended December 31,

2023 2022 2023 2022 2023 2022 2023 2022

2 unchanged sentences

Purchases - other miscellaneous items $ 3,456 $ 2,763 $ 332 $ 279 $ — $ — $ 3,788 $ 3,042

The Company’s cash flow impact from transactions with its related parties for each of the three months ended September 30, 2023 and 2022, are as follows (in thousands):

SMCI | Q2 2024 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 six months ended December 31, 2023 and 2022, are as follows (in thousands):

Ablecom Compuware Corporate Venture Total

Three months ended September 30,

Six months ended December 31, Six months ended December 31, Six months ended December 31, Six months ended December 31,

2023 2022 2023 2022 2023 2022 2023 2022

Net sales $ 6 $ 3 $ 20,998 $ 27,872 $ 12,173 $ 17,251 $ 33,177 $ 45,126

Purchases - inventory $ 97,199 $ 94,562 $ 128,353 $ 100,717 $ — $ — $ 225,552 $ 195,279

Purchases - other miscellaneous items $ 8,215 $ 7,526 $ 749 $ 537 $ — $ — $ 8,964 $ 8,063

The Company’s cash flow impact from transactions with its related parties for each of the six months ended December 31, 2023 and 2022, are as follows (in thousands):

Ablecom Compuware Corporate Venture Total

Six months ended December 31, Six months ended December 31, Six months ended December 31, Six months ended December 31,

2023 2022 2023 2022 2023 2022 2023 2022

Changes in accounts receivable $ — $ — $ 3,239 $ 137 $ ( 1,625 ) $ 3,041 $ 1,614 $ 3,178

11 unchanged sentences

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.

The maximum number of shares available under the Original 2020 Plan was 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 remained 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 which, among other things, increased the number of shares available for award under the 2020 Plan by an additional 2,000,000 shares.

On January 22, 2024, the stockholders of the Company approved a further amendment and restatement of the Original 2020 Plan (as amended and restated from time to time, the “2020 Plan”) which, among other things, further increased the number of shares available for award under the 2020 Plan by an additional 1,500,000 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.

4 unchanged sentences

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

As of September 30, 2023, the Company had 1,324,299 authorized shares available for future issuance under the 2020 Plan.

As of December 31, 2023, the Company had 483,780 authorized shares available for future issuance under the 2020 Plan.

Offering of Common Stock

On December 5, 2023, the Company completed a public offering of 2,415,805 shares of the Company's common stock at $ 262.00 per share, with 2,315,105 shares sold by the Company and 100,700 shares sold by selling stockholders.

The Company received net proceeds of approximately $ 582.8 million, after deducting underwriting discounts and commissions and offering expenses payable by the Company.

The Company did not receive any proceeds from the sale of the shares of common stock by the selling stockholders.

Common Stock Repurchase and Retirement

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.

Under the common stock repurchase program, shares may be purchased from time to time in open market transactions, block trades, through plans established under the Securities Exchange Act Rule 10b5-1, or otherwise.

The number of shares purchased and the timing of such purchases are based on working capital requirements, market and general business conditions, and other factors, including alternative investment opportunities.

No shares were repurchased under the share repurchase program during the three months ended September 30, 2023.

As of September 30, 2023, $ 50.0 million was available for additional repurchases of common stock.

No shares were repurchased under the share repurchase program during the three and six months ended December 31, 2023.

As of December 31, 2023, $ 50.0 million was available for additional repurchases of common stock.

The share repurchase program was effective until January 31, 2024, at which time the remaining unutilized portion of such program expired.

SMCI | Q2 2024 Form 10-Q | 24

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Determining Fair Value

The Company’s fair value of RSUs and PRSUs is based on the closing market price of the Company’s common stock on the date of grant.

The Company’s fair value of RSUs is based on the closing market price of the Company’s common stock on the date of grant.

The Company estimates the fair value of stock options granted using the Black-Scholes-option-pricing model.

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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.

SMCI | Q1 2024 Form 10-Q | 21

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

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 months ended September 30, 2023 and 2022 was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:

The fair value of stock option grants for the three and six months ended December 31, 2023 and 2022 was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:

Three Months Ended

September 30,

December 31, Six Months Ended

2023 2022 2023 2022

Risk-free interest rate 4.78 %

4.16 % - 4.25 %

Expected term 3.00 years - 5.99 years

4.15 % - 4.78 %

2.81 % - 4.25 %

Expected term 5.99 years

6.07 years 3.00 years - 5.99 years

Dividend yield — % — % — % — %

1 unchanged sentence

51.64 % - 51.68 %

56.87 % - 58.89 %

50.62 % - 51.68 %

Weighted-average fair value $ 156.09 $ 36.37 $ 179.16 $ 34.60

The following table shows total stock-based compensation expense included in the condensed consolidated statements of operations for the three months ended September 30, 2023 and 2022 (in thousands):

The following table shows total stock-based compensation expense included in the condensed consolidated statements of operations for the three and six months ended December 31, 2023 and 2022 (in thousands):

Three Months Ended

September 30,

December 31, Six Months Ended

2023 2022 2023 2022

Cost of sales $ 3,555 $ 1,486 $ 9,459 $ 2,370

5 unchanged sentences

Stock-based compensation expense, net $ 33,492 $ 13,600 $ 75,006 $ 23,275

As of September 30, 2023, $ 65.4 million of unrecognized compensation cost related to stock options is expected to be recognized over a weighted-average period of 2.65 years and $ 203.1 million of unrecognized compensation cost related to unvested RSUs is expected to be recognized over a weighted-average period of 2.67 years.

Additionally, as described below, $ 0.5 million of unrecognized compensation cost related to the 2021 CEO Performance Stock Option is expected to be recognized over a period of 0.5 years.

As of December 31, 2023, $ 73.5 million of unrecognized compensation cost related to stock options is expected to be recognized over a weighted-average period of 3.26 years and $ 237.0 million of unrecognized compensation cost related to unvested RSUs is expected to be recognized over a weighted-average period of 2.65 years.

As described below, there is no unrecognized compensation cost related to the 2021 CEO Performance Stock Option as of December 31, 2023.

Additionally, $ 27.4 million of unrecognized compensation cost related to the 2023 CEO Performance Stock Option is expected to be recognized over a period of 1.75 years.

SMCI | Q2 2024 Form 10-Q | 25

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Stock Option Activity

2021 CEO Performance Award

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”).

3 unchanged sentences

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.

SMCI | Q1 2024 Form 10-Q | 22

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, 2023 was as follows:

The achievement status of the operational and stock price milestones as of December 31, 2023 was as follows:

Annualized Revenue Milestone (in billions) Achievement Status Stock Price Milestone Achievement Status

3 unchanged sentences

$ 6.8 Achieved $ 95 Achieved (4)

$ 8.0 Probable $ 120 Achieved (5)

$ 8.0 Achieved (5)

$ 120 Achieved (6)

(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 unchanged sentences

(4) The vesting of the fourth 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 September 2023.

(5) Revenue reported for the four quarters ended December 31, 2023 was $ 9.3 billion.

Achievement of the $ 8.0 billion revenue goal has not yet been certified by the Company’s Compensation Committee.

(6) On June 19, 2023, the Compensation Committee certified achievement of the $ 120 stock price milestone based upon the 60 trading day average stock price from March 6, 2023 through May 30, 2023.

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).

The Company will immediately recognize a catch-up expense for all accumulated expenses from the grant date through the quarter in which the operational milestone was first deemed probable of being achieved.

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 months ended September 30, 2023 and 2022, the Company recognized compensation expense related to the 2021 CEO Performance Stock Option of $ 0.2 million and $ 1.3 million, respectively.

As of September 30, 2023 and June 30, 2023, the Company had $ 0.5 million and $ 0.7 million, respectively, in unrecognized compensation cost related to the 2021 CEO Performance Stock Option.

The unrecognized compensation cost as of September 30, 2023 is expected to be recognized over a period of 0.5 years.

During the three and six months ended December 31, 2023, the Company recognized compensation expense related to the 2021 CEO Performance Stock Option of $ 0.5 million and $ 0.7 million, respectively.

During the three and six months ended December 31, 2022, the Company recognized compensation expense related to the 2021 CEO Performance Stock Option of $ 1.9 million and $ 3.2 million, respectively.

As of December 31, 2023 and June 30, 2023, the Company had $ 0.0 million and $ 0.7 million, respectively, in unrecognized compensation cost related to the 2021 CEO Performance Stock Option.

SMCI | Q2 2024 Form 10-Q | 26

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table summarizes stock option activity during the three months ended September 30, 2023 under all plans:

2023 CEO Performance Award

In November 2023, the Compensation Committee approved the grant of a stock option award for 500,000 shares of common stock to the Company’s CEO (the “2023 CEO Performance Stock Option”).

The 2023 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 and (2) service through each vesting date.

Each of the five vesting tranches of the 2023 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 $ 450.00 per share for the first tranche and increases up to $ 1,100.00 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 $ 450.00 per share, prior to November 14, 2026, the Company’s CEO must hold shares that he acquires until November 14, 2026, 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.

SMCI | Q2 2024 Form 10-Q | 27

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The achievement status of the operational and stock price milestones as of December 31, 2023 was as follows:

Annualized Revenue Milestone (in billions)

Achievement Status

Stock Price Milestone

Achievement Status

$ 13.0 Probable

$ 450 Not met

$ 15.0 Not Probable

$ 600 Not met

$ 17.0 Not Probable

$ 750 Not met

$ 19.0 Not Probable

$ 900 Not met

$ 21.0 Not Probable

$ 1,100 Not met

During the three and six months ended December 31, 2023, the Company recognized compensation expense related to the 2023 CEO Performance Stock Option of $ 2.5 million.

As of December 31, 2023 , the Company had $ 27.4 million in unrecognized compensation cost related to the 2023 CEO Performance Stock Option.

The unrecognized compensation cost as of December 31, 2023 is expected to be recognized over a period of 1.75 years.

On the respective grant dates of each of the 2021 CEO Performance Award and the 2023 CEO Performance Award, a Monte Carlo simulation was used to determine for each tranche of each award (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).

The Company will immediately recognize a catch-up expense for all accumulated expenses from the respective grant date through the quarter in which the operational milestone was first deemed probable of being achieved.

The following table summarizes stock option activity during the six months ended December 31, 2023 under all plans:

Outstanding Weighted

5 unchanged sentences

Forfeited/Cancelled ( 7,127 ) $ 60.76

Balance as of September 30, 2023 3,356,147 $ 62.71 6.66

Options vested and exercisable at September 30, 2023 2,092,330 $ 34.42 5.47

RSU and PRSU Activity

The following table summarizes RSU and PRSU activity during the three months ended September 30, 2023 under all plans:

Balance as of December 31, 2023 3,798,239 $ 119.94 7.00

Options vested and exercisable at December 31, 2023 2,044,524 $ 36.57 5.36

SMCI | Q2 2024 Form 10-Q | 28

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table summarizes RSU activity during the six months ended December 31, 2023 under all plans:

Time-Based RSUs

5 unchanged sentences

Forfeited ( 45,329 ) $ 91.53

Balance as of September 30, 2023 2,178,074 $ 104.49

Balance as of December 31, 2023 2,210,683 $ 128.75

SMCI | Q2 2024 Form 10-Q | 29

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The Company recorded a provision for income taxes of $ 20.2 million and $ 38.9 million for the three months ended September 30, 2023 and 2022, respectively.

The effective tax rate was 11.4 % and 17.4 % for the three months ended September 30, 2023 and 2022, respectively.

The effective tax rate for the three months ended September 30, 2023 is lower than that for the three months ended September 30, 2022, primarily due to an increase in the tax deduction for stock compensation in the three months ended September 30, 2023.

The Company recorded a provision for income taxes of $ 61.5 million and $ 81.7 million for the three and six months ended December 31, 2023, respectively, and $ 29.6 million and $ 68.5 million for the three and six months ended December 31, 2022, respectively.

The effective tax rate was 17.3 % and 15.3 % for the three and six months ended December 31, 2023, respectively, and 14.3 % and 15.9 % for the three and six months ended December 31, 2022, respectively.

The effective tax rate for the three months ended December 31, 2023 is higher than that for the three months ended December 31, 2022, primarily due to a 2 % increase caused by a reduction of foreign derived intangible income which is subject to lower income tax rate than a statutory tax rate of 21%.

In addition, there was a 1 % increase caused by more non tax deductible stock-based compensation for officers over one million dollars threshold.

The effective tax rate for the six months ended December 31, 2023 is lower than that for the six months ended December 31, 2022, primarily due to an increase in the tax deduction for stock-based compensation in the six months ended December 31, 2023.

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.

11 unchanged sentences

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 September 30, 2023 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 December 31, 2023 and any prior periods.

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

3 unchanged sentences

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

As of September 30, 2023, these remaining noncancelable commitments were $ 1.4 billion, including $ 66.4 million for related parties.

Segment Reporting

The Company operates in one operating segment that develops and provides high-performance server solutions based upon an innovative, modular and open-standard architecture.

The Company’s chief operating decision maker is the Chief Executive Officer.

As of December 31, 2023, these remaining noncancelable commitments were $ 1.9 billion, including $ 87.4 million for related parties.

SMCI | Q2 2024 Form 10-Q | 30

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Segment Reporting

The Company operates in one operating segment that develops and provides high-performance server and storage solutions based upon an innovative, modular and open-standard architecture.

The Company’s chief operating decision maker is the Chief Executive Officer.

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

September 30, June 30,

December 31, June 30,

Long-lived assets:

4 unchanged sentences

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.

Subsequent Events

On January 26, 2024, the Company entered into an agreement to purchase real estate for an aggregate price of $ 80.0 million, subject to certain adjustments to be determined at closing.

The transaction is expected to close during the third quarter of fiscal 2024.

The Company plans to acquire this property using its own cash.

On January 31, 2024, the Company entered into a lease for approximately 260,000 square feet of space in San Jose, California for a term of 79 months.

The Company currently intends to use such premises for additional warehouse space.

The lease also provides that the Company is required to rent an additional approximate 198,000 square feet of space in the same building after such space becomes available for the remainder of the term stated above.

Aggregate payment under the lease for both the primary space and additional space is approximately $ 0.6 million per month, subject to annual increase.

SMCI | Q2 2024 Form 10-Q | 31

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