Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Super Micro Computer Inc., profitability ratios
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).
The financial data over the analyzed periods reveals several key trends in profitability and return metrics.
- Gross Profit Margin
- The gross profit margin showed a generally fluctuating trend, starting at 14.16% in 2019, rising to a peak of 18.01% in 2023, but then declining significantly to 13.75% in 2024. This indicates some variability in cost control or pricing strategies impacting the core profitability of goods sold.
- Operating Profit Margin
- The operating profit margin demonstrated a consistent upward trajectory from 2.78% in 2019 to 10.68% in 2023, reflecting improved operational efficiency or reduced operating expenses relative to revenue. However, in 2024, there was a notable decrease to 8.08%, which, although still healthy compared to earlier years, suggests some operational challenges or increased costs impacting operating income.
- Net Profit Margin
- The net profit margin improved steadily over the period, beginning at 2.05% in 2019 and rising each year to a high of 8.98% in 2023. The margin slightly decreased to 7.69% in 2024, indicating that despite some pressure, the company has managed to maintain relatively strong bottom-line profitability over the years.
- Return on Equity (ROE)
- The return on equity showed a significant and continuous increase from 7.64% in 2019 to a peak of 32.45% in 2023. This substantial rise reflects enhanced profitability relative to shareholders' equity, possibly driven by improved net income and effective use of equity capital. The subsequent decrease to 21.28% in 2024, while marked, still indicates a strong return to shareholders.
- Return on Assets (ROA)
- The return on assets also followed a strong upward trend from 4.27% in 2019 to 17.42% in 2023, indicating more efficient use of assets to generate earnings. The reduction to 11.73% in 2024, while less pronounced than other metrics, suggests some moderation in asset utilization effectiveness.
Overall, the data reflects a period of improving profitability and returns through 2023, followed by a noticeable, though partial, reversal in 2024. The declines in gross profit margin, operating profit margin, net profit margin, ROE, and ROA in the latest year may suggest emerging challenges such as increased costs, pricing pressures, or investment impacts requiring further investigation.
Return on Sales
Return on Investment
Gross Profit Margin
Super Micro Computer Inc., gross profit margin calculation, comparison to benchmarks
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Gross profit | 2,061,410) | 1,283,012) | 800,001) | 534,538) | 526,210) | 495,522) | |
| Net sales | 14,989,251) | 7,123,482) | 5,196,099) | 3,557,422) | 3,339,281) | 3,500,360) | |
| Profitability Ratio | |||||||
| Gross profit margin1 | 13.75% | 18.01% | 15.40% | 15.03% | 15.76% | 14.16% | |
| Benchmarks | |||||||
| Gross Profit Margin, Competitors2 | |||||||
| Apple Inc. | 46.21% | 44.13% | 43.31% | 41.78% | 38.23% | 37.82% | |
| Arista Networks Inc. | 64.13% | 61.95% | 61.07% | 63.80% | 63.94% | — | |
| Cisco Systems Inc. | 64.73% | 62.73% | 62.55% | 64.02% | 64.26% | 62.94% | |
| Dell Technologies Inc. | 23.60% | 22.18% | 21.63% | 31.22% | 31.40% | — | |
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).
1 2024 Calculation
Gross profit margin = 100 × Gross profit ÷ Net sales
= 100 × 2,061,410 ÷ 14,989,251 = 13.75%
2 Click competitor name to see calculations.
- Gross Profit
- The gross profit exhibited a consistent upward trajectory over the analyzed period, rising steadily from 495.5 million US dollars in 2019 to 2.06 billion US dollars in 2024. Notably, there was an accelerated increase beginning in 2021, with gross profit nearly quadrupling from approximately 534.5 million to over 2 billion by 2024, indicating substantial growth in core profitability.
- Net Sales
- Net sales demonstrated fluctuating growth trends with an initial decline from 3.5 billion US dollars in 2019 to approximately 3.34 billion in 2020. However, sales rebounded thereafter, increasing to 3.56 billion in 2021 and experiencing substantial growth to 14.99 billion by 2024. The rapid ascent in net sales during the last three years suggests significant expansion in market demand or operational scale.
- Gross Profit Margin
- The gross profit margin showed variability, starting at 14.16% in 2019 and improving to 15.76% in 2020. This was followed by a slight decline to 15.03% in 2021, a modest recovery to 15.4% in 2022, and a notable increase to 18.01% in 2023, indicating enhanced profitability relative to sales. However, in 2024, the margin dropped sharply to 13.75%, suggesting that despite higher absolute gross profit and sales, cost pressures or pricing changes could have compressed profitability margins.
- Overall Trends and Insights
- The data reveals significant overall growth in sales and gross profit, particularly from 2021 onwards, reflecting effective business expansion or increased demand. The fluctuation in gross profit margin, especially the decline in 2024 despite record sales and profit levels, may warrant further investigation into cost management or pricing strategies. The substantial growth in absolute values combined with margin variances suggests that while the company has scaled operations successfully, maintaining profitability ratios may require attention.
Operating Profit Margin
Super Micro Computer Inc., operating profit margin calculation, comparison to benchmarks
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Income from operations | 1,210,774) | 761,142) | 335,167) | 123,947) | 85,654) | 97,233) | |
| Net sales | 14,989,251) | 7,123,482) | 5,196,099) | 3,557,422) | 3,339,281) | 3,500,360) | |
| Profitability Ratio | |||||||
| Operating profit margin1 | 8.08% | 10.68% | 6.45% | 3.48% | 2.57% | 2.78% | |
| Benchmarks | |||||||
| Operating Profit Margin, Competitors2 | |||||||
| Apple Inc. | 31.51% | 29.82% | 30.29% | 29.78% | 24.15% | 24.57% | |
| Arista Networks Inc. | 42.05% | 38.52% | 34.86% | 31.37% | 30.19% | — | |
| Cisco Systems Inc. | 22.64% | 26.37% | 27.09% | 25.76% | 27.63% | 27.39% | |
| Dell Technologies Inc. | 5.89% | 5.64% | 4.60% | 5.46% | 2.85% | — | |
| Operating Profit Margin, Sector | |||||||
| Technology Hardware & Equipment | 26.07% | 24.86% | 25.14% | 24.78% | 19.76% | — | |
| Operating Profit Margin, Industry | |||||||
| Information Technology | 26.62% | 24.49% | 26.43% | 26.73% | 22.69% | — | |
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).
1 2024 Calculation
Operating profit margin = 100 × Income from operations ÷ Net sales
= 100 × 1,210,774 ÷ 14,989,251 = 8.08%
2 Click competitor name to see calculations.
- Income from operations
- The income from operations exhibited notable fluctuations over the analyzed periods. Initially, there was a decline from 97,233 thousand USD in 2019 to 85,654 thousand USD in 2020. Subsequently, a steady increase is observed, with income rising significantly to 123,947 thousand USD in 2021, followed by a sharp escalation reaching 335,167 thousand USD in 2022. This upward trend continued robustly with income from operations reaching 761,142 thousand USD in 2023 and further surging to 1,210,774 thousand USD in 2024.
- Net sales
- Net sales demonstrated a somewhat volatile pattern with an initial decrease from 3,500,360 thousand USD in 2019 to 3,339,281 thousand USD in 2020. From 2021 onwards, net sales consistently increased, rising to 3,557,422 thousand USD. This growth became notably pronounced in 2022 when sales jumped to 5,196,099 thousand USD, then climbed further to 7,123,482 thousand USD in 2023. The period ended with a substantial leap to 14,989,251 thousand USD in 2024, indicating a strong expansion in sales volume or price.
- Operating profit margin
- The operating profit margin experienced an overall improvement throughout the periods analyzed, despite some variability. The margin started at a relatively low 2.78% in 2019, slightly decreasing to 2.57% in 2020. Thereafter, a positive trend emerged, with the margin increasing to 3.48% in 2021 and then nearly doubling to 6.45% in 2022. This growth continued more rapidly, reaching a peak of 10.68% in 2023 before slightly declining to 8.08% in 2024. Despite this recent decline, margins remained considerably higher than in the earlier years.
- Overall observations
- The data suggests that the company has undergone a significant phase of expansion, particularly from 2021 onwards, with substantial growth in both net sales and income from operations. The operating profit margin improvements highlight enhanced operational efficiency or cost management, although the slight margin contraction in 2024 could warrant further monitoring. The strong sales and income growth in the latest periods indicate successful scaling efforts or increased market demand.
Net Profit Margin
Super Micro Computer Inc., net profit margin calculation, comparison to benchmarks
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net income | 1,152,666) | 639,998) | 285,163) | 111,865) | 84,308) | 71,918) | |
| Net sales | 14,989,251) | 7,123,482) | 5,196,099) | 3,557,422) | 3,339,281) | 3,500,360) | |
| Profitability Ratio | |||||||
| Net profit margin1 | 7.69% | 8.98% | 5.49% | 3.14% | 2.52% | 2.05% | |
| Benchmarks | |||||||
| Net Profit Margin, Competitors2 | |||||||
| Apple Inc. | 23.97% | 25.31% | 25.31% | 25.88% | 20.91% | 21.24% | |
| Arista Networks Inc. | 40.73% | 35.62% | 30.87% | 28.52% | 27.38% | — | |
| Cisco Systems Inc. | 19.18% | 22.13% | 22.91% | 21.26% | 22.75% | 22.39% | |
| Dell Technologies Inc. | 3.63% | 2.39% | 5.50% | 3.45% | 5.01% | — | |
| Net Profit Margin, Sector | |||||||
| Technology Hardware & Equipment | 20.04% | 20.66% | 21.34% | 21.20% | 17.54% | — | |
| Net Profit Margin, Industry | |||||||
| Information Technology | 20.64% | 20.39% | 22.45% | 23.62% | 19.67% | — | |
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).
1 2024 Calculation
Net profit margin = 100 × Net income ÷ Net sales
= 100 × 1,152,666 ÷ 14,989,251 = 7.69%
2 Click competitor name to see calculations.
- Net Income
- Net income showed a consistent and substantial upward trend over the analyzed period. Starting at 71,918 thousand USD in 2019, it increased moderately to 84,308 thousand USD in 2020 and 111,865 thousand USD in 2021. A significant acceleration occurred between 2021 and 2022, with net income rising more than twofold to 285,163 thousand USD, followed by further strong growth to 639,998 thousand USD in 2023, and reaching 1,152,666 thousand USD by mid-2024.
- Net Sales
- Net sales fluctuated initially, moving from 3,500,360 thousand USD in 2019 down slightly to 3,339,281 thousand USD in 2020. The figure then increased to 3,557,422 thousand USD in 2021 before experiencing marked growth in the subsequent years. Sales climbed to 5,196,099 thousand USD in 2022 and continued to rise to 7,123,482 thousand USD in 2023. By mid-2024, sales exhibited a remarkable surge, more than doubling the prior year’s figure to 14,989,251 thousand USD.
- Net Profit Margin
- The net profit margin improved steadily throughout the period, starting at 2.05% in 2019. Incremental increases were observed, reaching 2.52% in 2020 and 3.14% in 2021. A significant rise occurred in 2022, with the margin reaching 5.49%, followed by a jump to 8.98% in 2023. The margin slightly declined to 7.69% in 2024 but remained substantially higher than in previous years.
- Summary of Trends
- The data indicates a strong overall growth trajectory in both revenue generation and profitability. Net income grew at an accelerating pace, driven by increasing net sales and improved profit margins. The period from 2021 to 2024 notably reflects pronounced expansion and enhanced operational efficiency, as evidenced by the increasing net profit margins and the doubling of net sales in the latest year. The slight decrease in net profit margin in 2024 suggests some pressure on profitability despite impressive sales growth, warranting attention to cost management or pricing strategies going forward.
Return on Equity (ROE)
Super Micro Computer Inc., ROE calculation, comparison to benchmarks
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net income | 1,152,666) | 639,998) | 285,163) | 111,865) | 84,308) | 71,918) | |
| Total Super Micro Computer, Inc. stockholders’ equity | 5,417,206) | 1,972,005) | 1,425,575) | 1,096,225) | 1,065,540) | 941,015) | |
| Profitability Ratio | |||||||
| ROE1 | 21.28% | 32.45% | 20.00% | 10.20% | 7.91% | 7.64% | |
| Benchmarks | |||||||
| ROE, Competitors2 | |||||||
| Apple Inc. | 164.59% | 156.08% | 196.96% | 150.07% | 87.87% | 61.06% | |
| Arista Networks Inc. | 28.54% | 28.91% | 27.68% | 21.13% | 19.11% | — | |
| Cisco Systems Inc. | 22.70% | 28.44% | 29.70% | 25.66% | 29.57% | 34.62% | |
| Dell Technologies Inc. | — | — | — | 131.10% | — | — | |
| ROE, Sector | |||||||
| Technology Hardware & Equipment | 96.41% | 101.96% | 124.98% | 97.82% | 69.73% | — | |
| ROE, Industry | |||||||
| Information Technology | 29.37% | 32.00% | 39.15% | 42.48% | 35.75% | — | |
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).
1 2024 Calculation
ROE = 100 × Net income ÷ Total Super Micro Computer, Inc. stockholders’ equity
= 100 × 1,152,666 ÷ 5,417,206 = 21.28%
2 Click competitor name to see calculations.
- Net Income Trend
- Net income exhibits a consistent and significant upward trajectory over the six-year period. Starting at $71,918 thousand in June 2019, it increased to $1,152,666 thousand by June 2024. The most substantial growth occurred between June 2021 and June 2024, where the net income more than tenfold from $111,865 thousand to over $1.15 million.
- Stockholders' Equity Development
- Total stockholders' equity has also shown a marked increase, rising from $941,015 thousand in June 2019 to $5,417,206 thousand by June 2024. The equity growth experienced an acceleration from June 2022 onwards, indicating possible retained earnings accumulation or capital infusion contributing to the company's financial base expansion.
- Return on Equity (ROE) Analysis
- The Return on Equity demonstrates a positive and strengthening trend, improving from 7.64% in June 2019 to a peak of 32.45% in June 2023. However, there is a slight decline in the last reported period, with ROE at 21.28% in June 2024. Despite this reduction, the ROE remains substantially higher than in earlier years, indicating enhanced profitability relative to shareholder equity.
- Overall Financial Performance Insights
- The data reflects robust financial growth with increasing profitability and enhanced equity base. Significant rises in net income and equity suggest effective operational performance and successful capital management strategies. The strong ROE levels, notwithstanding the recent dip, indicate efficient utilization of equity to generate profit amid rising scale.
Return on Assets (ROA)
Super Micro Computer Inc., ROA calculation, comparison to benchmarks
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net income | 1,152,666) | 639,998) | 285,163) | 111,865) | 84,308) | 71,918) | |
| Total assets | 9,826,092) | 3,674,729) | 3,205,077) | 2,241,964) | 1,918,646) | 1,682,594) | |
| Profitability Ratio | |||||||
| ROA1 | 11.73% | 17.42% | 8.90% | 4.99% | 4.39% | 4.27% | |
| Benchmarks | |||||||
| ROA, Competitors2 | |||||||
| Apple Inc. | 25.68% | 27.51% | 28.29% | 26.97% | 17.73% | 16.32% | |
| Arista Networks Inc. | 20.31% | 20.98% | 19.96% | 14.66% | 13.39% | — | |
| Cisco Systems Inc. | 8.29% | 12.38% | 12.57% | 10.86% | 11.82% | 11.88% | |
| Dell Technologies Inc. | 3.91% | 2.73% | 6.00% | 2.63% | 3.88% | — | |
| ROA, Sector | |||||||
| Technology Hardware & Equipment | 18.69% | 20.58% | 21.62% | 18.88% | 13.59% | — | |
| ROA, Industry | |||||||
| Information Technology | 11.95% | 12.52% | 14.57% | 14.67% | 11.45% | — | |
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).
1 2024 Calculation
ROA = 100 × Net income ÷ Total assets
= 100 × 1,152,666 ÷ 9,826,092 = 11.73%
2 Click competitor name to see calculations.
The financial data reflects significant growth over the analyzed periods, with some fluctuations in profitability metrics.
- Net Income
- The net income shows a consistent upward trend from 2019 to 2024. Starting at $71.9 million in 2019, the figure increased steadily each year, reaching $1.15 billion in 2024. Notably, the growth accelerated markedly after 2021, with the 2022 figure more than doubling the previous year, and subsequent years continuing this strong upward trajectory.
- Total Assets
- Total assets demonstrate a robust increase, nearly doubling from approximately $1.68 billion in 2019 to $3.67 billion by 2023, and then surging significantly to $9.83 billion in 2024. This rapid growth from 2023 to 2024 suggests substantial asset acquisition or investment in the most recent period.
- Return on Assets (ROA)
- The ROA shows a general rising trend from 4.27% in 2019 to a peak of 17.42% in 2023, indicating improving profitability relative to asset base over these years. However, in 2024, ROA decreased to 11.73%, despite higher net income and asset levels, suggesting that asset growth outpaced income growth in this last period, leading to reduced efficiency in asset utilization.
Overall, the data portrays strong financial expansion, characterized by substantial gains in both net income and total assets, alongside an improving ability to generate returns on those assets until the most recent year where efficiency declined slightly. This pattern could reflect strategic investments or capital expenditures aimed at supporting future growth.