Common-Size Income Statement
Super Micro Computer Inc., common-size consolidated income statement
Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).
Over the observed annual periods, net sales consistently represent the baseline at 100% for each year, serving as a reference point for analyzing other financial metrics as percentages of net sales.
- Cost of Sales and Gross Profit
- The cost of sales fluctuated within the range of approximately -81.99% to -86.25% of net sales. A slight improvement was noted in the year ending June 30, 2023, when the cost dropped to -81.99%, contributing to the peak gross profit margin of 18.01%. However, in the subsequent year, the cost rose again to -86.25%, resulting in a decline in gross profit margin to 13.75%, which is the lowest in the observed period except for the initial year. Overall, gross profit exhibited volatility, peaking in 2023 before retracting significantly in 2024.
- Operating Expenses
- Operating expenses, encompassing research and development, sales and marketing, and general and administrative expenses, demonstrated a declining trend as a percentage of net sales. Research and development expenses steadily decreased from -5.14% in 2019 to -3.09% in 2024. Similarly, sales and marketing expenses declined from -2.2% to -1.27%, and general and administrative expenses fell from -4.03% to -1.32% over the same timeframe. This collective reduction in operating expenses contributed to the overall decrease in total operating expenses from -11.38% to -5.67% of net sales.
- Income from Operations and Profitability
- Income from operations showed a positive upward trend, starting at 2.78% in 2019, with minor fluctuations, reaching a notable peak of 10.68% in 2023. Despite a slight decline to 8.08% in 2024, operational profitability remained significantly higher compared to earlier years, reflecting improved operational efficiency likely driven by reduced operating expenses.
- Other Income and Interest Expense
- Other income and expense items remained relatively minor and stable, fluctuating close to zero, with occasional positive and negative variances. Interest expense stayed low throughout the period, averaging around -0.1% to -0.15% of net sales, suggesting limited borrowing costs relative to sales.
- Income Before Tax and Income Tax Provision
- Income before income tax provision mirrored the trend of income from operations, increasing notably from 2.56% in 2019 to a peak of 10.59% in 2023 before decreasing to 8.1% in 2024. The income tax provision percentage was inconsistent, showing a very low burden in early years (e.g., -0.09% in 2020) but spiking to -1.55% in 2023 and then considerably declining to -0.42% in 2024, which affected net income outcomes.
- Net Income
- Net income experienced significant growth over the timeframe, more than tripling from 2.05% in 2019 to 8.98% in 2023, demonstrating improved overall profitability. In 2024, net income declined to 7.69%, still substantially above earlier years, indicating sustained profit levels despite the decrease in gross profit margin.
In summary, the data reveals a company managing to increase profitability primarily through controlling operating expenses, despite some volatility in gross profit margins linked to fluctuations in the cost of sales. The improvement in operational income and net income suggests effective cost management and operational efficiency gains. The variability in income tax provision also indicates potential changes in tax strategy or tax rates impacting the after-tax profitability.