Super Micro Computer Inc. (NASDAQ:SMCI)

The financial data reveals significant developments in profitability and capital investment over the observed periods.

Net Operating Profit After Taxes (NOPAT)

The NOPAT exhibits a robust upward trend from 2020 through 2025. Starting at approximately $70.4 million in 2020, it more than doubles by 2022, reaching around $314.1 million, and continues to grow sharply, peaking at about $1.21 billion by 2025. This trend indicates a strong and sustained improvement in the company's profitability over the six-year span.

Invested Capital

Invested capital shows a steady increase in the early years, rising from around $1.24 billion in 2020 to nearly $2.44 billion by 2023. However, there is a pronounced surge thereafter, with invested capital more than tripling by 2024 to approximately $7.68 billion and reaching roughly $11.49 billion in 2025. This substantial growth suggests a major expansion or significant capital allocation in the recent years.

Return on Invested Capital (ROIC)

The ROIC demonstrates an initial ascending trajectory, increasing from 5.68% in 2020 to a peak of 25.75% in 2023. Following this high point, the ROIC declines in the subsequent years to 14.55% in 2024 and further to 10.5% in 2025. This pattern implies improved operational efficiency and profitability relative to invested capital up to 2023, after which the rate of return diminishes despite continued growth in profits and capital investment.

Overall, the data depicts a company that has markedly enhanced its earnings and substantially increased its capital base. While profitability in absolute terms continues to rise, the efficiency of capital utilization, as measured by ROIC, reaches a peak around 2023 and then moderates, potentially reflecting the impact of rapid capital expansion on returns.

Operating Profit Margin (OPM)

The operating profit margin demonstrates a significant upward trend from 2.63% in 2020 to a peak of 11.58% in 2023, indicating improved operational efficiency and profitability. However, this margin declines notably in subsequent years, dropping to 8.96% in 2024 and further to 7.15% in 2025, suggesting some challenges or increased costs affecting profitability after the peak year.

Turnover of Capital (TO)

Capital turnover remains relatively stable with minor fluctuations during the initial years, with values around 2.69 to 2.95 from 2020 to 2023. A clear decline is observed starting in 2024, falling to 1.97 and slightly decreasing further to 1.94 in 2025. This downward movement implies a decrease in asset efficiency or slower asset utilization in generating sales.

1 – Effective Cash Tax Rate (CTR)

The metric representing one minus the effective cash tax rate stays consistently high, fluctuating between approximately 75% and 87%, indicating that the company retains a large portion of its earnings after cash taxes. Although there is variability, no clear directional trend is present, suggesting relatively stable tax management over the examined period.

Return on Invested Capital (ROIC)

ROIC shows a strong positive trend from 5.68% in 2020 to a robust peak of 25.75% in 2023, reflecting growing effectiveness in generating returns from invested capital. Post-peak, ROIC declines to 14.55% in 2024 and further to 10.5% in 2025, signaling a reduction in capital return efficiency that parallels the drop in operating profit margin and capital turnover.

The financial data over the examined years reveal several notable trends in the company's performance metrics.

Net Operating Profit Before Taxes (NOPBT)

The NOPBT exhibits a strong upward trajectory over the six-year period. Starting at 87,695 thousand US dollars in 2020, it more than doubled by 2021 to 119,032 thousand US dollars. A significant surge is observed in 2022 where NOPBT triples to 375,146 thousand US dollars, followed by continued substantial increases in the subsequent years, culminating in 1,594,240 thousand US dollars by 2025. This represents an overall growth of nearly 18 times from 2020 to 2025, indicating a robust improvement in profitability before taxes.

Adjusted Net Sales

The trend in adjusted net sales is similarly upward, showing consistent growth year over year. Beginning at 3,339,631 thousand US dollars in 2020, sales increased modestly to 3,555,970 thousand US dollars in 2021. A marked acceleration occurs in 2022, rising to 5,227,643 thousand US dollars, continuing to 7,194,069 thousand in 2023, and then sharply increasing to 15,101,179 thousand in 2024 and 22,287,048 thousand in 2025. This pattern reflects a substantial expansion of revenue, more than sixfold over the period examined, suggesting effective sales growth strategies or market expansion.

Operating Profit Margin (OPM)

The operating profit margin shows notable fluctuations throughout the period. It started at 2.63% in 2020, improved to 3.35% in 2021, and then experienced a significant increase in 2022 to 7.18%. The margin peaked at 11.58% in 2023, reflecting increased efficiency or cost control relative to sales. However, in the subsequent years, OPM declined to 8.96% in 2024 and further to 7.15% in 2025. Despite the reduction, the operating margin remains considerably higher than at the beginning of the period, indicating sustained profitability improvements but with some downward adjustment after the peak year.

Overall, the data depict a company undergoing rapid growth in both revenue and profitability, achieving substantial increases in net operating profits alongside aggressive sales expansion. The operating profit margin improvement through 2023 suggests enhanced operational efficiency, although the later decline signals potential pressure on profit margins that may warrant further analysis. The pronounced growth in sales and profit underscores an expanding business scale with improved financial performance over the reviewed period.

The data reveals significant growth in adjusted net sales over the examined period. From June 30, 2020, to June 30, 2025, adjusted net sales increased steadily, with a notable acceleration from 2022 onwards. The value nearly doubled between June 30, 2023, and June 30, 2024, and continued this sharp upward trajectory into June 30, 2025, indicating strong revenue expansion.

Invested capital also experienced a marked increase, especially in the latter years of the period. Initial growth from 2020 to 2021 was moderate, followed by a more substantial rise in 2022. A significant jump is observable between June 30, 2023, and June 30, 2024, with invested capital more than tripling, and then further increasing by mid-2025. This suggests increased capital investment, likely to support the expanding business operations corresponding with the revenue growth.

The turnover of capital (TO) ratio, which measures the efficiency of capital use, displayed variability throughout the period. The ratio started at 2.69 in 2020, rose slightly in 2021, then declined to 2.35 in 2022. It recovered to 2.95 in 2023, reflecting improved capital utilization efficiency. However, from 2024 onwards, the ratio declined sharply to 1.97 and then slightly more to 1.94 in 2025, indicating a decrease in turnover efficiency relative to the surge in invested capital.

Adjusted Net Sales

Demonstrated consistent and rapid growth, especially after 2022, indicating expanding sales volume or pricing power.

Invested Capital

Increased substantially, particularly from 2023 to 2025, reflecting heightened capital expenditure or asset accumulation in pursuit of growth.

Turnover of Capital (TO) Ratio

Exhibited fluctuations with an overall downward trend in the final years, suggesting that capital investments have outpaced the company's ability to generate sales efficiently from those assets.

Overall, the data suggests an aggressive expansion strategy characterized by rapid revenue growth supported by significant capital investment. However, the declining turnover of capital ratio in the most recent years indicates a potential need to focus on improving capital efficiency to sustain profitability as the business expands.

Cash Operating Taxes

Cash operating taxes exhibit a strong upward trend over the six-year period. Starting at $17,343 thousand in 2020, the amount initially decreased slightly in 2021 to $15,997 thousand, before sharply increasing in the subsequent years. By 2023, the cash taxes rose significantly to $205,704 thousand, with continued growth to $236,509 thousand in 2024 and reaching $387,126 thousand in 2025. This indicates a substantial rise in cash tax payments, reflecting possibly higher taxable income or changes in tax regulations.

Net Operating Profit Before Taxes (NOPBT)

NOPBT shows consistent and significant growth throughout the period. Beginning at $87,695 thousand in 2020, operating profit increased to $119,032 thousand in 2021. This growth accelerated substantially in the following years, with NOPBT climbing to $375,146 thousand in 2022 and doubling to $833,387 thousand in 2023. The trend continues with the figure reaching $1,353,291 thousand in 2024 and $1,594,240 thousand in 2025. The data reveals robust operational performance and profitability expansion over these years.

Effective Cash Tax Rate (CTR)

The effective cash tax rate shows variability during the period. It started at 19.78% in 2020, then decreased to 13.44% in 2021, reflecting a lower tax burden relative to operating profit in that year. In 2022, the rate increased moderately to 16.27%, followed by a further rise to 24.68% in 2023. The rate then dropped to 17.48% in 2024 before rising again to 24.28% in 2025. This fluctuation could be influenced by changes in tax regulations, tax planning strategies, or varying profit compositions year over year.