Super Micro Computer Inc. (NASDAQ:SMCI)

Debt Ratios

The debt to equity ratio remained consistently low from 2019 to 2024, but notable fluctuations occurred. It held steady at 0.03 from 2019 to 2020, then increased substantially to 0.42 in 2022 before declining to 0.15 in 2023 and rising again to 0.4 in 2024. Including operating lease liabilities, the values followed a similar pattern, slightly higher overall.

The debt to capital ratio also showed a rising trend from 0.02 in 2019 to a peak of 0.3 in 2022, then retreated to 0.13 in 2023 before increasing again to 0.29 in 2024. The inclusion of operating lease liabilities increased the ratio marginally but mirrored the same trend.

Debt to assets ratio rose gradually from 0.01 in 2019 to 0.19 in 2022, indicating increased reliance on debt relative to total assets. This ratio subsequently dropped to 0.08 in 2023 and then ascended back to 0.22 in 2024. The inclusion of operating lease liabilities did not significantly alter the observed pattern.

Financial Leverage

Financial leverage increased moderately from 1.79 in 2019 to 2.25 in 2022, indicating a higher use of debt relative to equity and assets during this period. However, this trend reversed in the last two years surveyed, with leverage declining to 1.86 in 2023 and slightly further to 1.81 in 2024.

Interest and Fixed Charge Coverage Ratios

Interest coverage exhibited a pronounced upward trend from 13.97 in 2019 to a peak of 72.55 in 2023, reflecting a significantly improved ability to service interest expenses from operating earnings. There was a slight decline in 2024 to 63.83, but coverage remained substantially higher than in earlier years.

Fixed charge coverage, measuring the capacity to cover fixed obligations including interest and lease expenses, also showed steady improvement. It rose from 7.48 in 2019 to 42.45 in 2024, with a marked acceleration after 2020, indicating strengthening financial stability and reduced risk associated with fixed commitments.

Summary

Overall, the data suggests that while the company’s leverage increased significantly through 2022, it moderated somewhat afterwards. Despite fluctuations in debt ratios, the firm’s coverage ratios improved strongly over the period, demonstrating enhanced earnings capacity to meet debt and fixed obligations. This indicates a trend toward maintaining manageable leverage levels alongside strengthening financial health and creditworthiness.

The financial data reveals several notable trends in the company's capital structure and leverage over the observed period.

Total Debt

The total debt increased moderately from 23,647 thousand USD in June 2019 to 29,401 thousand USD in June 2020. A significant surge is observed in June 2021, where the total debt rose sharply to 98,190 thousand USD. This upward trajectory escalated remarkably in June 2022, reaching 596,764 thousand USD, followed by a decline to 290,302 thousand USD in June 2023. However, by June 2024, total debt dramatically increased to 2,174,145 thousand USD, indicating a major accumulation of liabilities within a relatively short period.

Total Stockholders’ Equity

Stockholders’ equity demonstrates a consistent and substantial growth trend throughout the period. Starting from 941,015 thousand USD in June 2019, equity rose annually to reach 1,065,540 thousand USD in June 2020 and 1,096,225 thousand USD in June 2021. The upward momentum strengthened further in June 2022 with equity at 1,425,575 thousand USD, climbing to 1,972,005 thousand USD in June 2023. By June 2024, equity witnessed a pronounced increase, soaring to 5,417,206 thousand USD, which suggests strong capital reinforcement and retained earnings expansion.

Debt to Equity Ratio

The leverage ratio remained low and stable at 0.03 in both June 2019 and June 2020, reflecting minimal reliance on debt relative to equity. It increased to 0.09 in June 2021, indicating a growing use of debt financing. By June 2022, the ratio jumped significantly to 0.42, signaling a marked shift toward higher leverage. Despite this, it reduced to 0.15 in June 2023, implying a deleveraging effort or equity growth outpacing debt. The ratio increased again to 0.4 by June 2024, underscoring renewed debt accumulation relative to equity.

Overall, the company’s financial structure has evolved with notable increases in both debt and equity levels, accompanied by fluctuating leverage ratios. The sharp rises in total debt in 2022 and especially 2024 warrant attention, as does the substantial growth in equity, suggesting active capital management strategies. The fluctuating debt to equity ratio highlights periods of both leveraged expansion and relative deleveraging, indicating dynamic financial policy adjustments in response to operational or market demands.

The financial data over the period from June 30, 2019 to June 30, 2024 demonstrates significant changes in the company’s capital structure and financial leverage.

Total debt (including operating lease liability)

The total debt shows a general increasing trend with notable fluctuations. From 2019 to 2020, debt more than doubled, rising from approximately 23.6 million USD to 53.8 million USD. It further increased sharply to nearly 119.1 million USD by 2021. The most substantial increase occurred between 2021 and 2022, with total debt surging more than fivefold to 620.6 million USD. However, this was followed by a considerable decline to 309.5 million USD in 2023, before mounting sharply again to 2.21 billion USD in 2024. This pattern indicates periods of aggressive leveraging, possibly for growth or capital expenditures, interspersed with partial deleveraging.

Total stockholders’ equity

Stockholders’ equity exhibits steady growth over the entire period. Starting from 941 million USD in 2019, it increased consistently each year, reaching approximately 1.07 billion USD in 2020, 1.1 billion USD in 2021, and 1.43 billion USD in 2022. The growth accelerated further, attaining nearly 1.97 billion USD in 2023 and surging to 5.42 billion USD in 2024. This strong equity growth suggests robust retained earnings, capital injections, or other equity-enhancing activities, contributing to a solid increase in net worth and financial stability.

Debt to equity ratio (including operating lease liability)

The debt to equity ratio reflects the interplay between debt and equity trends. It remains low in 2019 at 0.03, indicating very conservative leveraging levels relative to equity. The ratio increases incrementally to 0.05 in 2020 and 0.11 in 2021, then spikes to 0.44 in 2022, coinciding with the sharp rise in debt. The ratio dips to 0.16 in 2023 as the company reduces debt and equity grows. However, the ratio climbs again to 0.41 in 2024 following another significant debt increase. Despite these fluctuations, the company generally maintains a relatively moderate leverage level when compared to dramatic absolute debt increases, supported by substantial equity expansion.

Overall, the data suggests a strategy involving significant capital deployment fueled by both debt and equity growth, with considerable variability in leveraging levels. The company appears to be managing financial leverage flexibly while steadily growing its equity base, which supports sustained operational and expansion activities.

Total Debt

The total debt demonstrates a significant increase over the analyzed periods. Starting from 23,647 thousand USD in 2019, it rose steadily to 29,401 thousand USD in 2020, and then more than tripled to 98,190 thousand USD by 2021. The following year, there was a sharp escalation to 596,764 thousand USD in 2022. This was followed by a notable reduction to 290,302 thousand USD in 2023. However, in 2024, the total debt surged dramatically to 2,174,145 thousand USD, representing the highest level in the observed timeframe.

Total Capital

Total capital shows a consistent upward trend from 2019 to 2024. Beginning at 964,662 thousand USD in 2019, it increased annually reaching 1,094,941 thousand USD in 2020 and 1,194,415 thousand USD in 2021. The growth accelerated in the subsequent years, with capital reaching 2,022,339 thousand USD in 2022, then 2,262,307 thousand USD in 2023, and culminating at 7,591,351 thousand USD in 2024. The data suggests a strong expansion of capital, especially pronounced in the last year.

Debt to Capital Ratio

The debt to capital ratio exhibits fluctuations across the analyzed years. Initially low at 0.02 in 2019, it slightly increased to 0.03 in 2020 and saw a more significant rise to 0.08 in 2021. A sharp spike occurred in 2022, with the ratio escalating to 0.30, indicating a substantial increase in leverage relative to capital. The ratio then decreased to 0.13 in 2023, suggesting a reduction in relative debt levels. Nonetheless, in 2024, the ratio rose again to 0.29, approaching previous peak leverage levels observed in 2022.

The financial data reflects significant changes in the company's debt and capital structure over the six-year period ending June 30, 2024.

Total debt (including operating lease liability)

The total debt exhibits a marked upward trend, increasing from $23.6 million in 2019 to $2.21 billion in 2024. Notably, the debt level rose sharply from 2021 to 2022, moving from approximately $119 million to $620.6 million. After a decline to $309.5 million in 2023, the debt surged again by 2024, reaching its peak level in the timeframe considered. This indicates increased leverage or financing activities, potentially associated with expansion, acquisitions, or other capital-intensive projects.

Total capital (including operating lease liability)

Total capital also climbed steadily throughout the period, starting at $964.7 million in 2019 and ending at $7.63 billion in 2024. The most pronounced increase occurred between 2023 and 2024, where capital more than tripled from approximately $2.28 billion to $7.63 billion, suggesting significant inflows of funds or asset growth during this time frame.

Debt to capital (including operating lease liability) ratio

This ratio, indicating the proportion of debt financing relative to total capital, reveals fluctuations. Beginning at a low 0.02 in 2019, it rose to 0.3 by 2022, pointing to an increasing reliance on debt in the capital structure. Subsequently, the ratio decreased to 0.14 in 2023, suggesting a relative reduction of debt or growth in equity/capital sources. However, in 2024, the ratio increased again to 0.29, aligned with the substantial rise in total debt. Overall, the ratio demonstrates phases of increased leverage interspersed with periods of de-leveraging or capital strengthening.

Total Debt

The total debt exhibited a marked increasing trend over the periods analyzed. Starting at 23,647 thousand US dollars in 2019, there was a moderate rise up to 29,401 thousand US dollars in 2020. A significant jump occurred in 2021, with total debt more than tripling to 98,190 thousand US dollars. The upward trend intensified in 2022, reaching 596,764 thousand US dollars, followed by a decline to 290,302 thousand US dollars in 2023. However, in 2024, total debt surged dramatically to 2,174,145 thousand US dollars, representing the highest level in the observed timeframe.

Total Assets

Total assets steadily increased throughout the entire period. From 1,682,594 thousand US dollars in 2019, assets grew annually to reach 1,918,646 thousand US dollars in 2020 and 2,241,964 thousand US dollars in 2021. The growth accelerated in subsequent years, with assets rising to 3,205,077 thousand US dollars in 2022 and then to 3,674,729 thousand US dollars in 2023. The highest value recorded was in 2024, with assets totaling 9,826,092 thousand US dollars, nearly tripling the previous year's amount and indicating substantial expansion or investment activity.

Debt to Assets Ratio

The debt to assets ratio remained relatively low through 2019 to 2021, gradually rising from 0.01 in 2019, to 0.02 in 2020, and 0.04 in 2021, indicating conservative leverage levels relative to asset size. In 2022, the ratio escalated sharply to 0.19, reflecting a significant increase in liabilities compared to the asset base. Although the ratio decreased to 0.08 in 2023, suggesting deleveraging or asset growth outpacing debt, it again rose notably to 0.22 in 2024. This indicates that despite substantial asset growth, debt increased at a relatively faster pace, resulting in heightened financial leverage and potential increased risk exposure.

The financial data reveals significant fluctuations in the company's debt levels, asset base, and leverage ratios over the six-year period ending in June 2024. A detailed analysis of the trends is as follows:

Total Debt (Including Operating Lease Liability)

The company’s total debt has experienced a notable increase over the years. Starting at $23.6 million in 2019, the debt more than doubled to $53.8 million in 2020 and then more than doubled again to $119.1 million in 2021. A sharp spike occurred in 2022, when debt rose dramatically to $620.6 million. Although total debt decreased to $309.5 million in 2023, it surged again to a peak of $2.2 billion by mid-2024. This pattern indicates aggressive leveraging, especially pronounced between 2021 and 2024.

Total Assets

Total assets displayed a consistent upward trend throughout the period, expanding from approximately $1.68 billion in 2019 to nearly $9.83 billion in 2024. The asset base showed steady, moderate growth from 2019 to 2021, with increases from $1.68 billion to $2.24 billion. The growth rate accelerated thereafter, with assets reaching $3.21 billion in 2022, $3.67 billion in 2023, and then jumping substantially to $9.83 billion in 2024. This indicates substantial investment and expansion activity, particularly in the latest year.

Debt to Assets Ratio (Including Operating Lease Liability)

The debt to assets ratio fluctuated significantly, reflecting the changes in both debt and asset levels. Starting at a very low ratio of 0.01 in 2019, it increased modestly to 0.03 in 2020 and 0.05 in 2021, signifying cautious leverage management during these years. In 2022, the ratio rose sharply to 0.19, correlating with the spike in total debt that year, indicating a marked increase in financial leverage. Despite a decline to 0.08 in 2023, the ratio surged again to 0.22 in 2024, representing the highest level in the period and suggesting a high reliance on debt financing relative to assets at that time.

Overall, the data illustrates a company undergoing significant growth in assets, supported by increasingly leveraged financing. The pronounced increases in total debt and the resulting elevated debt to assets ratios in 2022 and 2024 highlight periods of intensified borrowing and potential financial risk. Monitoring these leverage levels alongside asset growth will be important for assessing the company's long-term financial stability and risk exposure.

Total Assets

The total assets experienced a steady increase from 1,682,594 thousand USD in 2019 to 3,674,729 thousand USD in 2023, representing substantial growth over the five-year period. A notable acceleration occurred between 2023 and 2024, with total assets nearly tripling to 9,826,092 thousand USD, indicating significant expansion or acquisition activity in the most recent year.

Total Stockholders’ Equity

Stockholders’ equity rose consistently from 941,015 thousand USD in 2019 to 1,972,005 thousand USD in 2023, illustrating positive retained earnings and capital infusion over the period. The year ending 2024 shows a pronounced increase, with equity surging to 5,417,206 thousand USD, which aligns with the sharp rise in total assets, suggesting strengthened capital structure and possible new equity issuance or retained earnings accumulation.

Financial Leverage

The financial leverage ratio gradually increased from 1.79 in 2019 to a peak of 2.25 in 2022, reflecting a growing reliance on debt relative to equity during this timeframe. However, during the subsequent years, it declined to 1.86 in 2023 and further to 1.81 in 2024, implying a strategic reduction in leverage or increased equity capital reducing the company's relative debt burden. Despite the fluctuations, leverage remained elevated compared to the initial year, but the trend in the last two years suggests a stabilizing or more conservative use of debt financing.

Earnings before interest and tax (EBIT)

The EBIT shows a general upward trend over the six-year period. Starting at 93,492 thousand US dollars in 2019, there is a slight decline in 2020 to 89,466 thousand US dollars, followed by a recovery in 2021 with 121,286 thousand US dollars. Subsequently, EBIT experiences significant growth in 2022, reaching 344,452 thousand US dollars, continuing to rise sharply to 761,155 thousand US dollars in 2023, and culminating at 1,235,312 thousand US dollars in 2024. This pattern indicates robust operational performance and increasing profitability over time.

Interest expense

Interest expense decreases sharply from 6,690 thousand US dollars in 2019 to 2,236 thousand US dollars in 2020, then remains relatively stable in 2021 at 2,485 thousand US dollars. Starting in 2022, interest expense increases notably, reaching 6,413 thousand US dollars, then progresses upward each year to 10,491 thousand US dollars in 2023 and 19,352 thousand US dollars in 2024. This indicates a rising cost of borrowing or increased debt levels in the later years.

Interest coverage

Interest coverage, which measures the ability to meet interest obligations from EBIT, improves markedly throughout the observed period. Beginning at 13.97 in 2019, it rises sharply to 40.01 in 2020 and continues increasing to 48.81 in 2021. The coverage ratio peaks at 72.55 in 2023 before slightly decreasing to 63.83 in 2024. Despite a slight decline in the final year, the ratio remains very strong, reflecting ample earnings to cover interest expenses and suggesting a healthy financial position regarding debt servicing capability.

Earnings before fixed charges and tax

The earnings before fixed charges and tax showed a fluctuating but generally upward trend over the six-year period. From 2019 to 2020, there was a slight decline from 100,192 to 96,459 thousand US dollars. However, from 2020 onwards, the earnings increased significantly each year, rising to 129,113 in 2021, then experiencing a sharp growth to 352,717 in 2022. This upward momentum accelerated further, reaching 769,454 in 2023 and peaking at 1,245,295 thousand US dollars in 2024, indicating strong operational performance improvement over the period.

Fixed charges

Fixed charges displayed a variable but generally increasing pattern. Initially, fixed charges decreased from 13,390 thousand US dollars in 2019 to 9,229 in 2020. Following this, the fixed charges rose incrementally each year: 10,312 in 2021, 14,678 in 2022, increasing further to 18,790 in 2023, and reaching 29,335 thousand US dollars in 2024. This reflects a moderate rise in fixed financial obligations or interest expenses over time.

Fixed charge coverage ratio

The fixed charge coverage ratio showed a consistent and significant improvement throughout the period. Starting at 7.48 in 2019, the ratio improved to 10.45 in 2020, then to 12.52 in 2021, indicating enhanced ability to cover fixed charges with earnings. The ratio more than doubled to 24.03 in 2022 and nearly doubled again to 40.95 in 2023. It reached its highest level at 42.45 in 2024. This increasing trend demonstrates a strengthening financial position in terms of covering fixed financial obligations with operating income.