Quantitative and Qualitative Disclosure About Market Risk
−Removed: Interest Rate Risk
+Added: Investment and Interest Rate Risk
+Added: We are exposed to interest rate risk related to our fixed-rate investment portfolio and outstanding debt.
+Added: The investment portfolio is managed consistent with our overall liquidity strategy in support of both working capital needs and growth of our businesses.
The primary objectives of our investment activities are to preserve principal, provide liquidity and maximize income without significantly increasing the risk.
8 unchanged sentences
Based on the outstanding principal indebtedness of $112.5 million under our credit facilities as of June 30, 2025, we believe that a 10% change in interest rates would not have a significant impact on the results of operations.
−Removed: Foreign Currency Risk
+Added: Foreign Exchange Rate Risk
+Added: We consider our direct exposure to foreign exchange rate fluctuations to be minimal as substantially all of our sales and purchases are in United States dollars.
To date, our international customer and supplier agreements have been denominated primarily in U.S.
−Removed: dollars and accordingly, we have limited exposure to foreign currency exchange rate fluctuations from customer agreements, and do not currently engage in foreign currency hedging transactions.
−Removed: The functional currency of our subsidiaries in the Netherlands and Taiwan is the U.S.
+Added: dollars and accordingly, we have limited exposure to foreign currency exchange rate fluctuations from customer agreements.
+Added: The functional currency of our subsidiaries in the Netherlands, Taiwan and Malaysia is the U.S.
However, certain loans and transactions in these entities are denominated in a currency other than the U.S.
1 unchanged sentence
Such fluctuations have not been significant historically, and a 10% change in foreign currency exchange rates would not have a significant impact on the results of operations.
−Removed: Realized and unrealized foreign exchange gain for fiscal years 2024, 2023 and 2022 was $6.3 million, $0.2 million and $7.7 million, respectively.
+Added: Gains or losses from foreign currency remeasurement are included in other income or expenses.
SMCI | 2025 Form 10-K | 54
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.