Super Micro Computer Inc. (NASDAQ:SMCI)

Debt Ratios

The company’s debt to equity ratio exhibited significant fluctuations over the observed period. Starting from a low level of 0.03 in 2020, the ratio rose sharply to 0.42 in 2022 before declining to 0.15 in 2023. Subsequently, it increased again to 0.75 by 2025, indicating an overall rising trend in leverage toward the end of the period.

When including operating lease liabilities, the debt to equity ratio follows a similar pattern but slightly higher values, reflecting the additional liabilities considered under this measure.

Debt to capital ratio trends similarly, moving from 0.03 in 2020 up to 0.30 in 2022, then decreasing to 0.13 in 2023, and rising again to 0.43 by 2025. The inclusion of operating lease liabilities results in a marginal increase in these ratios but maintains the overall trend.

Debt to assets ratio also increased from 0.02 in 2020 to 0.19 in 2022, followed by a reduction to 0.08 in 2023, and then a rise to 0.34 in 2025. Including operating leases again raises the ratio slightly but retains the same pattern.

Financial Leverage

Financial leverage ratio showed variability, beginning at 1.8 in 2020, increasing to a peak of 2.25 in 2022, then declining to 1.81 in 2024, before rising again to 2.22 in 2025. This pattern indicates moderate leveraging with periods of asset growth or debt reduction influencing the changes.

Interest and Fixed Charge Coverage

Interest coverage ratios were consistently high across the timeframe, signifying strong ability to cover interest expenses. The ratio progressed from 40.01 in 2020 to a peak of 72.55 in 2023, then declined sharply to 21.24 by 2025, indicating a weakening in interest coverage in the latter stage.

Fixed charge coverage followed a similar trend, increasing from 10.45 in 2020 to 42.45 in 2024, then falling to 15.61 in 2025. This trend mirrors the fluctuations in financial obligations coverage capacity, with the decline suggesting potential pressures on fixed payment coverage in the most recent period.

Summary

Overall, debt-related ratios reveal an increasing reliance on debt financing with notable volatility, particularly around 2022 and subsequent years. The leverage metrics suggest periods of higher financial risk followed by some deleveraging, and then renewed increases in leverage by 2025. Despite strong historical coverage of interest and fixed charges, the significant decrease in these ratios in the most recent period highlights a potential deterioration in financial flexibility and an increased risk profile going forward.

The financial data reveals significant changes in the company's capital structure over the periods analyzed. Total debt exhibits considerable fluctuations, with an initial increase from 29,401 thousand USD in 2020 to a peak of 5,767,64 thousand USD in 2022, followed by a decline in 2023 and a subsequent sharp rise reaching 4,757,653 thousand USD by 2025.

Stockholders' equity shows a steady upward trend throughout the periods. Beginning at 1,065,540 thousand USD in 2020, equity increases consistently each year, reaching a substantial 6,301,693 thousand USD by 2025. This indicates a growth in the company's net asset base and potential reinvestment of earnings or capital infusions.

The debt to equity ratio reflects the firm's leverage dynamics relative to changes in debt and equity. The ratio remains low in 2020 (0.03) and rises to 0.09 in 2021, suggesting a modest increase in debt relative to equity. A more pronounced increase occurs in 2022, with the ratio climbing to 0.42, indicative of a higher leverage position. Subsequently, the ratio decreases to 0.15 in 2023, then rises again to 0.40 in 2024, and further to 0.75 in 2025. The increasing ratio in the later years suggests a growing reliance on debt financing, although still within a range that balances equity expansion.

Total Debt

Shows high volatility with an initial moderate level, a peak in 2022, decrease in 2023, and substantial growth by 2025.

Stockholders' Equity

Demonstrates a consistent and robust growth trend over the entire period.

Debt to Equity Ratio

Indicates increasing leverage starting from a very low base, with fluctuations that suggest shifts in financing strategy, notably a significant uptick in debt relative to equity in recent years.

Overall, the trends suggest an expanding company that is increasing its equity base while concurrently adopting greater debt levels in recent years, potentially to finance growth initiatives. The balance between debt and equity indicates a move towards higher leverage, which should be monitored for potential impact on financial risk.

The analysis of the financial data over the six-year period reveals notable dynamics in the company's debt and equity positions as well as the overall leverage.

Total Debt (including operating lease liability)

The total debt has exhibited significant fluctuations throughout the period. Starting at 53,813 thousand USD in 2020, debt more than doubled by 2021 reaching 119,051 thousand USD. In 2022, there was a sharp increase to 620,564 thousand USD, followed by a reduction to 309,462 thousand USD in 2023. However, debt levels surged markedly to 2,209,527 thousand USD in 2024, and further escalated to 5,059,210 thousand USD by 2025. This trend indicates an aggressive increase in leverage, particularly in the last two reported years.

Total Stockholders’ Equity

Stockholders' equity has shown consistent growth year-over-year. Beginning at 1,065,540 thousand USD in 2020, equity increased gradually to 1,096,225 thousand USD in 2021 and further to 1,425,575 thousand USD in 2022. The upward trajectory accelerated in 2023 reaching 1,972,005 thousand USD, and significantly expanded to 5,417,206 thousand USD in 2024, continuing to 6,301,693 thousand USD in 2025. This consistent equity growth suggests strong retention of earnings or capital infusions during the period.

Debt to Equity Ratio (including operating lease liability)

The debt to equity ratio reflects the relationship between the company's debt levels and its equity. Initially low at 0.05 in 2020, this ratio more than doubled to 0.11 in 2021 and surged dramatically to 0.44 in 2022, reflecting increased leverage relative to equity. The ratio subsequently decreased to 0.16 in 2023, potentially due to the reduction in total debt at that time. Nevertheless, it rose again to 0.41 in 2024 and climbed substantially to 0.8 in 2025, highlighting a trend toward higher financial leverage. Despite the substantial growth of equity, debt has increased at an even faster pace in recent years.

Overall, the data indicate that while equity has grown strongly throughout the period, the company has increasingly relied on debt financing, particularly notable from 2022 onwards. The debt to equity ratio's fluctuations suggest periods of both deleveraging and rapid debt accumulation, with a pronounced increase in leverage in 2024 and 2025. This pattern warrants attention to the company's risk exposure and potential impacts on financial stability going forward.

Total debt

The total debt demonstrates a significant upward trend over the periods analyzed. Initially, the debt was relatively low at 29,401 thousand US dollars in mid-2020, followed by a sharp increase to 98,190 thousand US dollars in mid-2021. The debt surged drastically to 596,764 thousand US dollars in mid-2022, then decreased to 290,302 thousand US dollars by mid-2023. However, in the subsequent years, debt escalated significantly, reaching 2,174,145 thousand US dollars in mid-2024 and further rising to 4,757,653 thousand US dollars in mid-2025. This pattern indicates heightened leverage and increased reliance on external financing over time, with some volatility in the debt level around mid-2023.

Total capital

Total capital exhibits a consistent and substantial growth trend throughout the observed periods. Starting at 1,094,941 thousand US dollars in mid-2020, it increased modestly to 1,194,415 thousand in mid-2021. A more pronounced growth is seen from mid-2021 to mid-2022 with total capital reaching 2,022,339 thousand US dollars, then continued rising to 2,262,307 thousand by mid-2023. The capital expanded sharply to 7,591,351 thousand US dollars in mid-2024 and further to 11,059,346 thousand US dollars in mid-2025. This steady increase suggests ongoing capital accumulation, possibly through equity or retained earnings, supporting the company’s overall financial expansion.

Debt to capital ratio

The debt to capital ratio reflects considerable fluctuations in the company's leverage position relative to its capital base. The ratio started very low at 0.03 in mid-2020, indicating minimal debt relative to capital. It then increased to 0.08 in mid-2021 and surged sharply to 0.30 in mid-2022, highlighting a rapid rise in debt levels. Subsequently, the ratio decreased substantially to 0.13 in mid-2023, consistent with the earlier noted reduction in debt during that period. However, it then increased again to 0.29 in mid-2024 and rose further to 0.43 in mid-2025, suggesting that debt is constituting a larger portion of the company's capital structure in the most recent years. This volatility in leverage ratios may imply strategic shifts in financing policies or responses to changing market conditions.

Total Debt (including operating lease liability)

Over the analyzed period, total debt exhibited significant volatility and a sharp upward trend. Starting at $53.8 million in mid-2020, debt more than doubled by mid-2021 to approximately $119.1 million. A substantial increase occurred in mid-2022, with total debt rising to $620.6 million, followed by a decline to $309.5 million in mid-2023. However, from mid-2023 onward, total debt surged dramatically, reaching $2.21 billion by mid-2024 and further escalating to $5.06 billion by mid-2025. This pattern indicates periods of aggressive borrowing, possibly related to expansion or investment activities, with a pronounced increase in leverage toward the end of the timeframe.

Total Capital (including operating lease liability)

Total capital demonstrated a generally upward trajectory across the examined years. The capital increased steadily from approximately $1.12 billion in mid-2020 to about $1.22 billion in mid-2021. A notable jump occurred in mid-2022, with capital rising to approximately $2.05 billion, continuing to grow to $2.28 billion in mid-2023. Afterward, a marked escalation is observed, with total capital reaching $7.63 billion by mid-2024 and peaking at $11.36 billion in mid-2025. This growth in capital suggests expansion of the company's asset base and possibly an infusion of either equity or retained earnings complementing the increase in debt.

Debt to Capital Ratio (including operating lease liability)

The debt to capital ratio fluctuated considerably but demonstrated an increasing trend overall. Beginning at a low 0.05 in mid-2020, indicating minimal reliance on debt, the ratio doubled to 0.10 in mid-2021, then sharply increased to 0.30 in mid-2022. A temporary improvement is visible in mid-2023 as the ratio declined to 0.14, reflecting either a reduction in debt or an increase in capital. Thereafter, the ratio climbed again, reaching 0.29 by mid-2024 and further increasing to 0.45 by mid-2025. The trend underscores heightened financial leverage, with nearly half of the company's capital structure being financed through debt by the end of the period.

The financial data reveals a notable evolution in the company's capital structure and asset base over the periods analyzed. There is a significant increase in total debt, escalating from $29.4 million in the year ending June 30, 2020, to approximately $4.76 billion by June 30, 2025. This indicates a substantial rise in leverage over the five-year span.

Conversely, total assets also demonstrate marked growth, increasing from about $1.92 billion in 2020 to nearly $14.02 billion in 2025. This robust asset expansion highlights aggressive growth or investment initiatives undertaken during this period.

The debt to assets ratio, which measures the proportion of assets financed through debt, fluctuates across the years. Initially low at 0.02 in 2020, it rose modestly to 0.04 in 2021, surged sharply to 0.19 in 2022, dipped to 0.08 in 2023, and then climbed consistently to reach 0.34 by 2025. This pattern suggests variable reliance on debt financing, with a notable peak in 2022 followed by a reduction in 2023 before increasing again.

Total Debt

The total debt exhibits a rapid upward trajectory, with a particularly steep increase from 2023 ($290 million) to 2024 ($2.17 billion) and further to 2025 ($4.76 billion), indicating increased borrowing or liabilities.

Total Assets

Total assets have grown steadily year over year, notably accelerating in the last two years, consistent with expansive investments or asset acquisitions.

Debt to Assets Ratio

Despite large increases in debt, the debt to assets ratio remains below 0.5 throughout the period, though it escalates from a very low base to 0.34 in 2025, signaling increased leverage risk but still balanced by growing asset levels.

The financial data reveals significant changes in the company's debt levels and asset base over the reported periods. The trends indicate a substantial increase in both total debt and total assets, with notable fluctuations in the debt-to-assets ratio.

Total debt (including operating lease liability)

The total debt shows a marked growth from 53,813 thousand US dollars in mid-2020 to 5,059,210 thousand US dollars by mid-2025. This represents an overall nearly 94-fold increase in debt levels over the five-year span. Notably, debt experienced a sharp rise in 2022, reaching 620,564 thousand, after which it declined in 2023 to 309,462 thousand, followed by a significant surge in subsequent years, particularly between 2023 and 2025.

Total assets

Total assets also demonstrate a strong upward trajectory, increasing from 1,918,646 thousand US dollars in 2020 to 14,018,429 thousand US dollars in 2025. The asset base grew steadily each year, with the largest absolute increases occurring in 2024 and 2025. The asset growth is consistent but outpaced in relative terms by the increase in total debt during the latter years.

Debt to assets (including operating lease liability)

The debt-to-assets ratio reveals significant variability. Starting from a low 0.03 in 2020, it rose modestly to 0.05 in 2021 and then jumped sharply to 0.19 in 2022. The ratio decreased to 0.08 in 2023, suggesting a deleveraging or asset growth outpacing debt in that period. However, the ratio again increased markedly to 0.22 in 2024 and 0.36 in 2025, indicating an increasing reliance on debt financing relative to assets in the most recent years analyzed.

Overall, the data reflects an aggressive expansion strategy supported by escalating debt levels, particularly after 2023. While asset growth is substantial, the proportion of debt relative to assets is rising, pointing to an increasing leverage risk that should be carefully monitored in future periods.

The financial data reveals several significant trends over the assessed periods. Total assets show a consistent upward trajectory, increasing substantially from 1,918,646 thousand US dollars in mid-2020 to 14,018,429 thousand US dollars by mid-2025. This growth suggests considerable expansion in the company’s asset base over the five-year span.

Similarly, the total stockholders’ equity exhibits a strong positive trend. It rises from 1,065,540 thousand US dollars in mid-2020 to 6,301,693 thousand US dollars by mid-2025. This increase reflects an improvement in the company’s net worth and implies ongoing reinvestment of earnings or additional equity financing.

Regarding financial leverage, the ratio fluctuates across the periods without a clear long-term trend. Starting at 1.8 in 2020, it peaks at 2.25 in 2022, dips to 1.81 in 2024, and then increases again to 2.22 by 2025. These variations suggest adjustments in the balance between debt and equity financing, with occasional increases in reliance on debt relative to equity.

Total Assets

Increase by approximately 7.3 times from 2020 to 2025, indicating strong asset growth and potential expansion of operations or investments.

Stockholders' Equity

Growth of nearly 6 times over the same period, showing enhanced shareholder value and financial strength.

Financial Leverage

Fluctuating ratio between 1.8 and 2.25 suggests variable use of leverage, with some periods reflecting more cautious debt usage and others indicating greater debt-financed growth.

Overall, the company demonstrates robust growth in both assets and equity, which highlights a strengthening financial position. The fluctuations in financial leverage indicate an active approach to managing the capital structure, balancing between equity and debt sources to support growth and operational needs.

Earnings Before Interest and Tax (EBIT)

There is a clear and strong upward trend in EBIT from 2020 through 2025. The amount has risen steadily from 89,466 thousand US dollars in 2020 to an estimated 1,265,278 thousand US dollars by 2025. The increase is especially pronounced from 2021 onward, with EBIT more than doubling each year in the early part of the series and continuing to grow substantially thereafter, indicating robust operational profitability and efficiency gains.

Interest Expense

Interest expense has also increased over this period, but at a different scale and rate compared to EBIT. It started at 2,236 thousand US dollars in 2020 and climbed gradually to 19,352 thousand by 2024, then more sharply surged to 59,573 thousand in 2025. This suggests that the company has taken on more debt or higher-cost borrowing, especially evident in the sharp rise in the final year.

Interest Coverage Ratio

The interest coverage ratio shows variability throughout the timeline. It improved from 40.01 in 2020 to peak at 72.55 in 2023, reflecting a strong ability to cover interest expenses through EBIT during this period. However, the subsequent decline to 21.24 by 2025 denotes a weakening in this capacity, despite EBIT increases, due principally to the substantial rise in interest expense. This decline could warrant closer scrutiny of future solvency and debt servicing risks.

Earnings before Fixed Charges and Tax

The earnings before fixed charges and tax demonstrated a strong upward trend over the period analyzed. Starting at approximately $96.5 million in mid-2020, the figure more than doubled by mid-2021 to about $129.1 million. This growth accelerated markedly from mid-2021 to mid-2023, reaching approximately $769.5 million. The upward trend continued, though at a slower pace, with earnings peaking at around $1.29 billion by mid-2025. The substantial increase reflects a significant improvement in operational performance or revenue generation capabilities over the five-year span.

Fixed Charges

Fixed charges rose steadily throughout the period, starting at $9.2 million in mid-2020 and increasing to $10.3 million in mid-2021. The growth in fixed charges was moderate through mid-2022 ($14.7 million) and mid-2023 ($18.8 million), but from mid-2023 onwards, these costs escalated sharply. By mid-2024, fixed charges jumped to $29.3 million, and by mid-2025, they reached $82.6 million. The sharp increase in fixed charges in the final two years indicates increased financial obligations or other fixed expenses.

Fixed Charge Coverage Ratio

The fixed charge coverage ratio exhibits a generally improving trend from 10.45 in mid-2020 to a peak of 42.45 in mid-2024, suggesting an enhanced ability to cover fixed charges through earnings. This improvement is consistent with the rapid growth in earnings during the earlier years outpacing the rise in fixed charges. However, there is a notable decline in the coverage ratio by mid-2025, dropping to 15.61. This decline reflects the disproportionate increase in fixed charges relative to earnings in the final year, which may warrant attention regarding sustainability and financial risk management.