Super Micro Computer Inc. (NASDAQ:SMCI)

Gross Profit Margin

The gross profit margin shows an overall upward trend beginning in September 2018 at 14.16%. It gradually increases and peaks around 18.23% in the first quarter of 2023. Following this peak, there is a notable decline, with the margin decreasing steadily to 11.27% by the first quarter of 2025. This pattern suggests improving cost management or pricing strategies initially, followed by a period where either costs increased or pricing pressure reduced profitability at the gross level.

Operating Profit Margin

The operating profit margin starts at 2.78% in September 2018 and trends upward to reach a high of 10.68% in the third quarter of 2023. After this peak, a decline is observed, dropping to 6.09% by the first quarter of 2025. The trajectory indicates improved operational efficiency and cost control over several years, but recent figures suggest challenges in sustaining operational profitability.

Net Profit Margin

Net profit margin increases from 2.05% in September 2018, reaching a peak at 8.98% in the third quarter of 2023. Subsequently, it decreases to 5.34% by the first quarter of 2025. The margin progression reflects initial growth in overall profitability, but the decline post-peak points to rising costs, lower revenues, or other expenses impacting net income.

Return on Equity (ROE)

ROE demonstrates a significant upward movement starting at 7.64% in September 2018, steadily rising to reach 33.21% in the third quarter of 2023, the highest in the observed period. Following this peak, ROE declines to 18.04% by the first quarter of 2025. This trend indicates strong profitability generation relative to equity over time, but recent decreases suggest pressure on returns to shareholders, possibly from lower net income or changes in equity base.

Return on Assets (ROA)

ROA starts at 4.27% in September 2018 and rises markedly to peak at 18.81% in the third quarter of 2023, signaling more efficient use of assets to generate profits. After this peak, ROA decreases to 10.72% by the first quarter of 2025. The upward trend implies improving asset utilization efficiency, while the recent decline could reflect reduced asset productivity or rising asset base without commensurate profit growth.

The data reveals notable movements in net sales, gross profit, and gross profit margin over the examined periods, reflecting fluctuations in revenue generation and cost management.

Net Sales

Net sales exhibit considerable volatility across the quarters. Initial values hover around the 900,000 to 1,000,000 range (in thousands USD), followed by a decline in early 2019 before recovering and experiencing significant growth from mid-2021. The peak net sales occur near the end of 2023 and into 2024, exceeding 5 million (in thousands USD) in certain quarters. This pattern indicates strong growth phases interspersed with periods of contraction, suggesting possible market demand shifts or product cycle effects.

Gross Profit

Gross profit trends align somewhat with net sales, showing fluctuations but with a general upward trajectory over the longer term. Earlier quarters present gross profits around 120,000 to 140,000 (in thousands USD), which rise substantially after 2021. Peaks of over 500,000 (in thousands USD) occur in late 2023 and early 2024, corresponding with high sales figures. However, some quarters like mid-2024 and later show a decline from the peak, indicating potential margin pressures or cost increases despite high sales volumes.

Gross Profit Margin

The gross profit margin, provided as percentages from mid-2019 onward, shows a general upward pattern until around mid-2023, increasing from the low to mid-teens to a high of approximately 18.23%. This suggests improved efficiency or pricing power during this phase. After this peak, margins begin to decline steadily, falling to about 11.27% by early 2025. The declining margin in this later period, despite high revenue levels, points to increasing costs or competitive pricing pressures affecting profitability.

Overall, the analysis highlights a business experiencing strong growth in sales and profits during the latter half of the timeline, accompanied by an improving gross margin initially. However, toward the most recent quarters, although sales and gross profit remain elevated, there is a notable compression in gross profit margin, signaling emerging challenges in maintaining profitability ratios under rising cost or market pressure conditions.

Income from Operations

The income from operations shows significant fluctuations across the reported periods. Starting at 28,493 thousand USD in September 2018, the figure experiences noticeable declines and increases, with pronounced volatility between 2019 and 2020, dipping as low as 9,428 thousand USD in June 2020. From mid-2021 onwards, there is a strong upward trend, peaking at 378,314 thousand USD in December 2023. However, the most recent data points reveal a sharp decline, with income dropping to 146,780 thousand USD in March 2025. This suggests periods of both strong operational performance and subsequent challenges in maintaining that level.

Net Sales

Net sales demonstrate an overall increasing trend throughout the periods, growing from 971,118 thousand USD in September 2018 to a peak of over 5.9 million USD in December 2024. Despite some volatility and minor decreases in certain quarters, particularly around 2019 to mid-2020, sales generally strengthen year over year. The surge becomes especially pronounced after mid-2021, with sales growth accelerating markedly to reach multi-million dollar levels by 2023 and 2024. The latest quarter shows a slight decline but remains significantly above earlier years, indicating robust sales growth over the medium term.

Operating Profit Margin

The operating profit margin is only recorded from June 2019 onward and exhibits a consistent growth pattern for most quarters. Starting around 2.78%, it generally rises over time, reaching a high of 10.68% in September 2023. This upward progression suggests improvements in operational efficiency or cost management relative to sales. However, in the last few quarters, a downward adjustment is observed, with margins decreasing to 6.09% by March 2025. Despite this recent decline, the overall margin improvement compared to the earliest reported values indicates enhanced profitability during the majority of the reported period.

Summary of Trends

The data reveals a company experiencing significant growth in net sales with a corresponding improvement in operating profit margin until late 2023. Income from operations mirrors some of this growth but with greater volatility and sharp declines in the most recent periods. The recent downturn in both income from operations and operating margins could imply emerging operational challenges or external pressures impacting profitability despite historically strong sales growth.

The financial data indicate fluctuating trends in net income, net sales, and net profit margin over the periods analyzed. The following is a detailed examination of these trends.

Net Income (US$ in thousands)

Net income demonstrates significant variability across the quarters. It starts at 19,342 in September 2018, experiencing an overall upward trajectory with periodic declines. Notable increases are observed from March 2021 onward, peaking at 424,327 in March 2025. However, intermittent decreases in certain quarters, such as a drop to 108,777 in June 2024 following a high in December 2023, suggest some volatility. Despite these fluctuations, the general trend shows an expansion in net income over the analyzed period.

Net Sales (US$ in thousands)

Net sales exhibit a gradually increasing trend with some fluctuations. Starting near 971,118 in September 2018, sales saw some quarters with declines and subsequent recoveries. From March 2021 onward, a strong upward trend is visible, culminating at 5,679,962 in March 2025 following a high of 5,937,256 in December 2024. Although some minor declines are noticed, notably towards the last quarter (June 2024 to September 2024), the overall pattern reflects substantial growth in sales volume during the period.

Net Profit Margin (%)

The net profit margin data, available partially from June 2019 onwards, reveals a steady increasing trend beginning at 2.05% and reaching a peak around 8.98% in September 2023. After this peak, the margin shows a gradual decline through subsequent periods to 5.34% by March 2025. This suggests improving profitability performance up to late 2023, followed by a moderation in profit efficiency despite high net sales and income figures.

In summary, the company shows growing sales and increasing net income over the analyzed quarters, highlighting overall expansion. However, the recent decline in net profit margin, despite high nominal profits and revenues, could indicate emerging cost pressures or changes in operational efficiency that merit further review.

The analysis of the quarterly financial data reveals several noteworthy trends in the financial performance and equity position over the observed periods.

Net Income

Net income shows a generally increasing trend with significant fluctuations across quarters. Initially, the net income values remain relatively stable with modest quarter-to-quarter changes until early 2021. From mid-2021 onwards, there is a pronounced upward trajectory, peaking notably in late 2022 and early 2023. Some quarters, however, display sharp declines following spikes, indicating volatility in quarterly profitability. Overall, despite fluctuations, net income demonstrates robust growth over the longer term.

Total Stockholders’ Equity

The total stockholders’ equity exhibits consistent growth throughout the entire period. Starting from a base under $900 million, the equity increases steadily with minor variations each quarter. The pace of growth accelerates substantially from around 2022, culminating in equity values exceeding $6 billion by the last reported quarter. This continuous rise suggests strong retained earnings and potential capital infusions, contributing to an expanding equity base.

Return on Equity (ROE)

Return on equity, reported from June 30, 2019, onward, starts at moderate single-digit values and generally rises over the quarters, reaching double-digit percentages by late 2020. The highest ROE levels are observed between 2022 and mid-2023, with figures peaking above 30%, signaling enhanced profitability relative to equity during this period. However, after peaking, ROE declines gradually towards the end of the observation window, though it remains significantly elevated compared to the initial periods. This pattern reflects fluctuating profit efficiency against the equity base amid changing business conditions.

In summary, the data indicate strong equity growth paired with increasingly higher but volatile net income, which together drive elevated but somewhat variable returns on equity. The company appears to have entered a phase of accelerated financial expansion beginning around 2021, marked by rising net earnings and substantial equity accumulation. The fluctuations in profitability and ROE suggest sensitivity to market or operational factors, but the overall trajectory points towards sustained financial strength and improved shareholder value over the observed timeline.

The financial data demonstrates a notable evolution in the company's profitability, asset base, and returns over the periods observed. Several key patterns emerge from the analysis of net income, total assets, and Return on Assets (ROA).

Net Income Trends

The net income exhibits volatility throughout the periods, with initial values fluctuating between approximately 10,600 thousand US dollars to over 40,000 thousand US dollars before a pronounced surge starting around March 2022. From this point onward, net income sharply increased, reaching a peak of over 420,000 thousand US dollars by March 2025. Despite some intermittent declines, the general trajectory is upward, indicating growth in profitability over the longer term.

Total Assets Development

Total assets show gradual growth in the earlier periods, increasing from approximately 1.7 billion US dollars in late 2018 to just over 3 billion US dollars by late 2021. After this, a significant acceleration is observed, with assets nearly tripling by March 2025 to over 10.7 billion US dollars. This sharp increase suggests substantial investments or acquisitions and an expanding asset base supporting the company's operations.

Return on Assets (ROA) Analysis

ROA, an efficiency measure of how well assets generate earnings, was reported from June 2019 onwards. Initially, ROA fluctuated narrowly between 4.27% and 5.98% until mid-2021. A marked upward trend followed, reaching a peak of approximately 18.8% in March 2023. After this peak, a downward correction occurred, with ROA settling around 10.7% by March 2025. This pattern reflects initial gains in asset utilization efficiency, followed by some normalization possibly due to the rapid asset base expansion.

Interrelationships and Insights

The parallel growth in net income and total assets, especially the pronounced increase post-2021, indicates scaling of business operations or enhanced market performance. However, while net income surged, ROA declined after reaching its peak, suggesting that the efficiency in generating income from the expanded asset base decreased somewhat over time. This could imply that recent asset acquisitions or investments have yet to fully translate into proportional profit increases. Despite this, the overall financial health as indicated by rising net income and asset growth remains strong.