2 unchanged sentences
We are exposed to interest rate risk related to our fixed-rate investment portfolio and outstanding debt.
−Removed: 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.
2 unchanged sentences
To minimize this risk, we maintain our portfolio of cash equivalents and short-term investments in money market funds and certificates of deposit.
−Removed: Our investment in an auction rate security has been classified as non-current due to the lack of a liquid market for these securities.
Since our results of operations are not dependent on investments, the risk associated with fluctuating interest rates is limited to our investment portfolio, and we believe that a 10% change in interest rates would not have a significant impact on our results of operations.
−Removed: As of June 30, 2025, our investments were in money market funds, certificates of deposits and auction rate securities.
+Added: As of June 30, 2026, our investments were in money market funds and certificates of deposit.
We are exposed to changes in interest rates as a result of our borrowings under our term loan and revolving lines of credit.
2 unchanged sentences
Foreign Exchange Rate Risk
−Removed: 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.
+Added: We consider our direct exposure to foreign exchange rate fluctuations to be minimal as substantially all of our sales and purchases are denominated in United States dollars.
To date, our international customer and supplier agreements have been denominated primarily in U.S.
dollars and accordingly, we have limited exposure to foreign currency exchange rate fluctuations from customer agreements.
−Removed: The functional currency of our subsidiaries in the Netherlands, Taiwan and Malaysia is the U.S.
+Added: The functional currency of our subsidiaries including 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: Gains or losses from foreign currency remeasurement are included in other income or expenses.
+Added: Gains or losses from foreign currency remeasurement are included in other income (expense), net in our consolidated statements of operations .
SMCI | 2026 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.