Super Micro Computer Inc. (NASDAQ:SMCI)

The financial data reveals varied trends in the company's operational efficiency across the analyzed periods.

Inventory Turnover

The inventory turnover ratio exhibits fluctuations, initially declining from 3.3 in 2020 to 2.84 in 2022, followed by a rise to 4.04 in 2023, a drop to 2.98 in 2024, and a subsequent increase to 4.18 in 2025. This indicates variability in how frequently inventory is sold and replaced, with some recent improvement.

Receivables Turnover

The receivables turnover ratio shows a downward trend from 8.27 in 2020 to 5.48 in 2024, suggesting a slowdown in the collection of receivables; however, there is a significant rebound to 9.97 in 2025, indicating enhanced collection efficiency in the latest period.

Payables Turnover

The payables turnover ratio declines sharply from 6.74 in 2020 to 4.94 in 2021, then steadily increases to 15.24 by 2025. The substantial rise implies the company is paying off its suppliers more rapidly in recent years, reducing the time taken to settle payables.

Working Capital Turnover

The working capital turnover ratio remains relatively stable from 2020 through 2023, hovering around 3.77 to 3.95, but then declines notably to 2.28 in 2024 and remains low at 2.21 in 2025. This suggests decreased efficiency in using working capital to generate sales in the latter periods.

Average Inventory Processing Period

The number of days inventory is held rises from 110 in 2020 to a peak of 128 in 2022, indicating slower inventory movement, but then declines to as low as 87 by 2025, reflecting improvements in inventory management.

Average Receivable Collection Period

The average days to collect receivables increase from 44 in 2020 to 67 in 2024, pointing to lengthening collection times; however, this improves substantially to 37 days by 2025, indicating quicker receipts from customers in the latest year.

Operating Cycle

The operating cycle exhibits an overall increasing trend from 154 days in 2020 to 189 days in 2024, highlighting prolonged timeframes in inventory conversion and receivables collection; there is a notable reduction to 124 days in 2025, signaling enhanced operational efficiency.

Average Payables Payment Period

The average number of days to pay suppliers increases from 54 days in 2020 to 74 days in 2021, then progressively diminishes to 24 days by 2025. This accelerated payment pattern aligns with the increased payables turnover ratio, indicating quicker supplier payments.

Cash Conversion Cycle

The cash conversion cycle remains mostly steady at around 100 days for several years but peaks at 147 days in 2024 before returning to 100 days in 2025. The spike reflects temporary inefficiencies in cash flow conversion, which were subsequently corrected.

In summary, the company demonstrates periods of fluctuations in operational efficiency, with improvements in inventory and receivables management observed most recently. The company has significantly accelerated payments to suppliers in recent years while experiencing variable working capital utilization. Overall, the latest data indicates a trend toward more efficient cash flow and asset management after some periods of slowed performance.

The financial data indicates several notable trends over the periods from June 30, 2020, to June 30, 2025. The cost of sales has demonstrated a significant upward trajectory, increasing from approximately 2.8 billion US dollars in 2020 to over 19.5 billion US dollars by 2025. This reflects substantial growth in the scale of operations or increasing costs associated with production or procurement activities.

Inventories have also shown a marked increase over the same period. Starting at about 851 million US dollars in 2020, inventories rose steadily to over 4.68 billion US dollars by 2025. This increase suggests either an expansion in inventory holdings to meet anticipated demand or potential changes in inventory management strategies.

The inventory turnover ratio, which measures the efficiency of inventory management by comparing cost of sales to average inventory, exhibited fluctuations throughout these years. Initially, the ratio decreased from 3.3 in 2020 to 2.84 in 2022, implying a slower rate of inventory turnover during that period. However, a recovery occurred in 2023 and 2025, with turnover rising to 4.04 and then 4.18 respectively. These increases signal improved efficiency or faster movement of inventory in those years. The dip in the ratio around 2021 and 2022 could reflect challenges in inventory utilization or accumulation of stock, while the subsequent improvements suggest corrective actions or increased demand facilitating quicker inventory turnover.

Cost of Sales

Consistent and substantial annual growth, nearly sevenfold increase from 2020 to 2025, indicating expanding business operations or rising production costs.

Inventories

Significant buildup of inventory levels, with more than a fivefold increase over five years, possibly aligned with growth strategies or market demand expectations.

Inventory Turnover Ratio

Variable trend with an initial decline followed by improvement, suggesting fluctuations in inventory management efficiency or market conditions impacting the speed of inventory sales.

The financial data reveals significant growth in net sales over the observed periods. Net sales increased steadily from approximately US$3.34 billion in 2020 to about US$21.97 billion in 2025, demonstrating a strong upward trend with particularly notable expansions occurring between 2023 and 2025.

Accounts receivable, net of allowance for credit losses, showed a general increase alongside net sales, rising from around US$404 million in 2020 to a peak of approximately US$2.74 billion in 2024, before slightly decreasing to about US$2.20 billion in 2025. This trend indicates growing credit extended to customers, consistent with the revenue growth until 2024, followed by a reduction in receivables in 2025 despite further revenue gains.

The receivables turnover ratio exhibited a declining trend initially, moving from 8.27 times in 2020 down to 5.48 times in 2024, reflecting a slower collection of receivables relative to sales. However, in 2025, the ratio rebounded significantly to 9.97 times, suggesting a marked improvement in the efficiency of receivables collection or changes in credit policy.

Net Sales

Strong and consistent growth across all periods with an especially rapid increase from 2023 onwards.

Accounts Receivable

Generally rising trend mirroring sales growth until 2024, followed by a decline in 2025, indicating possible improvement in collections or sales terms.

Receivables Turnover

Gradual deterioration in turnover rate from 2020 to 2024, implying slower receivables collection despite higher sales, then a sharp increase in 2025, denoting enhanced collection effectiveness.

Overall, the data suggests that while the company experienced robust sales expansion, it faced challenges in maintaining the pace of accounts receivable collections, which improved notably in the latest period. This pattern may reflect changes in credit management strategies or shifts in customer payment behaviors.

The financial data reveals significant trends in cost management and supplier payment efficiency over the analyzed periods.

Cost of Sales

There is a marked increase in the cost of sales, rising consistently from approximately $2.81 billion in mid-2020 to over $19.54 billion by mid-2025. This reflects more than a sixfold increase over five years, indicating substantial growth in production or procurement expenses.

Accounts Payable

Accounts payable also demonstrate growth initially, increasing from around $418 million in 2020 to a peak of approximately $1.47 billion in mid-2024. However, it then declines to about $1.28 billion in mid-2025. The upward trend suggests increased supplier credit usage aligned with rising cost of sales, but the drop in the later period may indicate either accelerated payments or renegotiated terms.

Payables Turnover Ratio

The payables turnover ratio shows volatility but an overall upward trajectory, moving from 6.74 in 2020 to a high of 15.24 in 2025. Periods before 2025 exhibit some fluctuations, with a dip in 2021 (4.94) followed by gradual recovery and growth. The considerable increase in 2025 suggests the company is accelerating the rate at which it pays its suppliers relative to its purchases, potentially reflecting improved liquidity or strategic payment policies.

In summary, the data reflects robust growth in operational scale, evidenced by rising costs of sales and accounts payable. The accelerated payables turnover toward the end of the period indicates enhanced payment efficiency, suggesting a shift in working capital management. The decline in accounts payable despite rising costs in the final year points to faster settlement of obligations, which may impact cash flow but improve supplier relationships or credit terms.

The financial data reveals several key trends over the six-year period ending June 30, 2025. The company experiences a consistent increase in both working capital and net sales, though their relationship as indicated by the working capital turnover ratio shows notable changes.

Working Capital

The working capital figure increases steadily from US$885,126 thousand in June 2020 to US$9,956,862 thousand in June 2025. This signifies a significant accumulation of current assets over current liabilities, with an especially sharp increase noted from 2023 onward, suggesting a substantial rise in readily available resources or a strategic buildup in liquidity.

Net Sales

Net sales also demonstrate steady growth, rising from US$3,339,281 thousand in June 2020 to US$21,972,042 thousand by June 2025. This reflects strong revenue expansion, with an accelerating trend from 2022 forward, indicating successful sales growth or market expansion activities.

Working Capital Turnover

The working capital turnover ratio, which measures how efficiently the company uses its working capital to generate sales, remains relatively stable near 3.9 from 2020 to 2023. However, starting in 2024, this ratio declines sharply to 2.28 and further to 2.21 in 2025. This suggests that despite rising net sales, the increase in working capital outpaces sales growth, indicating reduced efficiency in working capital utilization during the latter years.

Overall, the company shows robust revenue growth and a substantial increase in working capital. However, the declining working capital turnover ratio in the most recent years may warrant closer examination to ensure that the capital employed is being used effectively and not leading to potential inefficiencies or excess investment in current assets relative to sales growth.

The inventory turnover ratio and the average inventory processing period exhibit notable fluctuations over the examined period. These metrics provide insight into the efficiency of inventory management and the speed at which inventory is converted into sales.

Inventory Turnover Ratio

The inventory turnover ratio shows variability across the years. It began at 3.3 in 2020, decreased to a low of 2.84 in 2022, which indicates a slower turnover. There was a marked improvement in 2023 with a rise to 4.04, followed by a decline to 2.98 in 2024. The ratio increased again to 4.18 in 2025, reaching its highest value in the dataset. These fluctuations suggest periods of both improved and reduced inventory efficiency, with the latest year demonstrating strong turnover performance.

Average Inventory Processing Period

The average inventory processing period, expressed in days, showed an inverse trend relative to the inventory turnover ratio. It started at 110 days in 2020 and increased to 128 days by 2022, indicating slower inventory cycles. A significant decrease occurred in 2023 to 90 days, suggesting faster inventory processing. This period increased again to 122 days in 2024 before dropping sharply to 87 days in 2025, the shortest processing time recorded. This pattern is consistent with the changes noted in the turnover ratio, confirming the inverse relationship where faster turnover corresponds to shorter processing periods.

Overall, the data indicates periods of fluctuating inventory management effectiveness, with a recent trend toward improved efficiency as evidenced by a higher inventory turnover ratio and reduced inventory processing days in the latest year. The notable volatility suggests the company may have faced operational or market changes impacting inventory control cycles over time.

The analysis of the receivables turnover and average receivable collection period over the examined years reveals notable fluctuations in the company's credit management efficiency.

Receivables Turnover

The receivables turnover ratio showed a declining trend from 8.27 in 2020 to 5.48 in 2024, indicating a gradual slowdown in the frequency of collections during this period. However, in 2025, there was a significant improvement to 9.97, surpassing all previous years and suggesting enhanced efficiency in collecting receivables during that year.

Average Receivable Collection Period

The average receivable collection period increased steadily from 44 days in 2020 to 67 days in 2024, reflecting a lengthening in the time taken to collect receivables, which typically signals potential challenges in cash flow management. In 2025, this trend was reversed sharply, with the period reducing to 37 days, indicating a marked improvement in collection speed.

Overall Observations

The inverse relationship between receivables turnover and collection period is evident throughout the periods reviewed. The initial years showed a deterioration in receivables efficiency, with turnover declining and collection periods increasing. The year 2025 marks a significant turnaround, pointing to potentially improved credit policies or collection processes leading to a more effective working capital cycle.

Average inventory processing period

The average inventory processing period shows some fluctuations between the periods observed. It began at 110 days in 2020 and gradually increased, reaching a peak of 128 days in 2022. A significant reduction occurred in 2023, dropping to 90 days, followed by a rise again to 122 days in 2024, and then a notable decrease to 87 days in 2025. This pattern indicates variability in inventory management efficiency over the years, with periods of improvement and regression.

Average receivable collection period

This period generally trended upwards from 44 days in 2020 to a peak of 67 days in 2024. The increase suggests a lengthening in the time taken to collect receivables, potentially indicating looser credit terms or collection challenges. However, in 2025, there is a marked improvement, with the period dropping sharply to 37 days, implying enhanced receivables management or quicker customer payments in the most recent year.

Operating cycle

The operating cycle, which combines inventory processing and receivable collection periods, generally increased from 154 days in 2020 to a peak of 189 days in 2024, reflecting a longer duration to convert inventory into cash. Notably, the operating cycle decreased to 124 days in 2025, indicating a significant improvement in overall working capital efficiency by reducing the time to complete the operating cycle.

Payables Turnover

The payables turnover ratio experienced a decline from 6.74 in 2020 to 4.94 in 2021, indicating slower payments to suppliers during that period. Subsequently, the ratio improved to 6.71 in 2022 and exhibited a consistent upward trend reaching 7.52 in 2023, 8.78 in 2024, and sharply increasing to 15.24 in 2025. This trend suggests an increasing efficiency in managing payables over the years, with the company accelerating its payment pace notably by the last recorded period.

Average Payables Payment Period

The average payables payment period showed an inverse pattern relative to the payables turnover. It lengthened from 54 days in 2020 to 74 days in 2021, reflecting slower payment behavior at that time. After 2021, the payment period steadily shortened from 54 days (2022) to 49 days (2023), then to 42 days (2024), culminating in a significant reduction to 24 days in 2025. This decrease aligns with the rising payables turnover ratio, indicating the company increasingly expedited its payment process to vendors over the analyzed period.

Overall Analysis

The data reveal a clear improvement in the company’s payables management starting in 2022, reversing a temporary slowdown observed in 2021. The notable acceleration in payment speed by 2025 could imply stronger liquidity, improved cash flow management, or renegotiated credit terms with suppliers. Such changes may reflect strategic adjustments to enhance supplier relationships or optimize working capital utilization. The pronounced rise in payables turnover and corresponding drop in payment days by 2025 warrant monitoring to ensure payment practices remain sustainable and aligned with financial objectives.

The data reveals notable fluctuations in the company's efficiency metrics related to working capital management over the reported periods. These metrics provide insight into inventory management, receivables collection, payables payment, and the overall cash conversion cycle.

Average Inventory Processing Period

The inventory processing period shows variability across the years. It increased from 110 days in 2020 to a peak of 128 days in 2022, followed by a significant reduction to 90 days in 2023. After rising again to 122 days in 2024, it dropped sharply to 87 days in 2025, indicating periods of both extended and shortened inventory turnover times.

Average Receivable Collection Period

The trend in receivables collection period indicates generally increasing days outstanding through 2024, moving from 44 days in 2020 up to 67 days in 2024. However, there is a notable improvement in 2025, where the period decreases substantially to 37 days, suggesting a marked enhancement in collecting receivables.

Average Payables Payment Period

Payables payment period exhibits a decreasing trend over the timeline. Starting at 54 days in 2020, it rises sharply to 74 days in 2021, but then progressively declines over the subsequent years to a considerably lower 24 days by 2025. This pattern indicates the company is paying its suppliers faster in the later years.

Cash Conversion Cycle

The cash conversion cycle demonstrates fluctuating performance, maintaining a base level of 100 days in 2020, 2021, and 2023. It peaks at 133 days in 2022 and reaches a maximum of 147 days in 2024, suggesting reduced operational efficiency in those years. By 2025, the cycle returns to 100 days, reflecting a recovery in working capital efficiency.

Overall, the data portrays a company experiencing varying levels of operational efficiency. Inventory turnover and receivable collection exhibited increases up to 2024 but improved substantially in 2025. Payables were managed more swiftly over time, reducing the average payment days. The cash conversion cycle mirrors these fluctuations, with the highest inefficiencies occurring in 2022 and 2024, and a return to more efficient levels in 2025. These dynamics highlight episodic challenges in working capital management with signs of notable improvement toward the most recent period.