Super Micro Computer Inc. (NASDAQ:SMCI)

Inventory Turnover

The inventory turnover ratio shows variability over the reported periods, beginning at 3.3 and moving within the range of approximately 2.5 to 5.1. Notably, there is a peak around early 2025, reaching values above 5, indicating a higher efficiency in managing inventory during those quarters. However, there are periods of decline, particularly in mid-2023 and 2024, where the ratio dips closer to 2.4, suggesting slower inventory movement during those times.

Receivables Turnover

The receivables turnover ratio fluctuates between approximately 5.5 and 10.2. Early in the timeline, it reaches a high around 10.2 in late 2019 and early 2020, followed by declines in several quarters through 2024, dropping to lows near 5.5 to 6.2. There is a moderate recovery towards the end of the series, with a ratio increasing to nearly 10 by early 2025. These shifts suggest variability in the effectiveness of collections from customers.

Payables Turnover

This ratio shows significant volatility across the periods. Initially around 6.7 to 8.3 in early 2020, it fluctuates with lows near 4.9 to 5.1 in the middle period and then displays an extraordinary spike in 2025 with values over 29 and even 33 before settling back down to around 15. The extreme increases in payables turnover ratios in 2025 indicate a substantial acceleration in settling payables during this period.

Working Capital Turnover

The working capital turnover ratio remains relatively stable between 3.7 and 4.1 until mid-2023. After this period, there is a notable decline to lows below 2.0 in mid-2024, followed by a mild recovery towards 2.7 by mid-2025. The downward trend points to less efficient use of working capital in the later periods compared to earlier ones.

Average Inventory Processing Period

The average inventory processing period generally lengthens from around 110 days in late 2019 to nearly 150 days in 2021. Thereafter, it shortens significantly to about 90 days in early 2023 before increasing again to a high of 152 days in mid-2024. This fluctuation indicates changes in the inventory management efficiency, with longer periods implying slower turnover at several points.

Average Receivable Collection Period

This metric trends between approximately 36 and 59 days, with some spikes reaching nearly 67 days in 2024. There appears to be cyclical increases and decreases with notable rises around mid-2022 and 2024, suggesting periods where the company experienced slower collections from its customers.

Operating Cycle

The operating cycle shows a generally increasing trend from 154 days in late 2019 up to around 200 days by mid-2021, signaling a lengthening in the time it takes to convert inventory and receivables to cash. After mid-2021, the cycle fluctuates down to roughly 120 days by 2025, indicating some improvement in operational efficiency towards the end.

Average Payables Payment Period

The payables payment period lengthens from 44 days at the end of 2019 to a peak of 74 days around late 2020, before shortening substantially again into single-digit days by 2025. This contraction, especially the sharp decrease in payables period late in the series, aligns with the spike seen in payables turnover, indicating faster payments to suppliers.

Cash Conversion Cycle

The cash conversion cycle mostly ranges between 90 and 130 days in the earlier periods, with an upward trend starting in 2022, reaching its highest point over 160 days in 2024. It decreases back to around 100 days by mid-2025. This suggests that the company experienced increasing delays in turning its investments in inventory and receivables into cash during the middle of the reported periods, with some recovery thereafter.

The cost of sales shows a fluctuating upward trend over the observed periods, with occasional notable surges. Starting from approximately 669 million in the third quarter of 2019, it increased gradually and saw significant spikes in the second half of 2023 and through 2024, reaching levels above 5 billion by late 2024. There are periods of sharp increases particularly from mid-2023 onwards, indicating either increased production or higher input costs in these quarters.

Inventories exhibit a general increasing pattern as well, beginning at around 685 million in late 2019 and rising steadily with some variability. The inventory value more than sextupled by the last quarter of 2024, peaking around 4.9 billion in that period. Some fluctuations are observed in intermediate periods, with slight decreases in the latter part of 2022 and mid-2023, but the overall trajectory is strongly upward. This growth in inventory levels suggests either an anticipation of higher demand, accumulation due to slower sales, or strategic stockpiling.

Inventory turnover ratios, provided only from March 2020 onward, demonstrate cyclical movements but generally lie within a range of about 2.4 to 5.1. Notably, turnover ratios dropped to lower values around late 2021 and early 2022, hinting at slower inventory movement relative to cost of sales in those quarters. Conversely, turnover improves towards mid-2023 and into 2025, indicating faster inventory turns. The peak turnover ratios over 5 in mid-2025 suggest a period of efficient inventory management or accelerated sales during that time.

Cost of Sales

Exhibits a rising trend with substantial increases especially from mid-2023 onwards, implying growing production/sales scale or cost pressures.

Inventories

Generally increase over time with notable accumulation, which could reflect growth strategies, supply chain factors, or demand forecasts.

Inventory Turnover

Varies cyclically but improves markedly in recent periods, indicating phases of enhanced inventory utilization and possible operational efficiencies.

Net Sales Trends

The net sales figures demonstrate fluctuations over the reported periods. Initially, there is moderate variability from late 2019 through early 2021, with net sales generally increasing from approximately 799.8 million to over 1 billion US dollars by mid-2021. Starting from late 2021, a strong upward trend emerges, with net sales reaching a peak exceeding 5.9 billion by the end of 2024. However, in 2025, sales appear to decline, falling under 5.8 billion and further decreasing to about 4.6 billion before showing some recovery to approximately 5.7 billion in mid-2025. This pattern suggests a period of substantial growth followed by some volatility in sales volumes.

Accounts Receivable Patterns

Accounts receivable values generally increase over the timeline, indicating an expanding credit extended to customers or growth in sales on credit terms. Starting at roughly 356.2 million in late 2019, the receivables rise with notable surges, particularly around early 2022 and mid-2024 when values exceed 2.7 billion, reflecting a significant increase in outstanding customer balances. However, the data also shows intermittent declines, such as in late 2023 and mid-2025, suggesting occasional improvements in collection efficiency or adjustments in credit policies.

Receivables Turnover Ratio Analysis

The receivables turnover ratio displays variability, ranging between approximately 5.48 and 10.23. Higher turnover values in 2020 and early 2021 indicate quicker collection of receivables during that period. Later periods show a general downward trend with occasional spikes, such as near the end of 2024 and mid-2025, signaling fluctuating efficiency in converting receivables into cash. Periods of lower turnover, especially noted in 2023 and early 2024, may highlight slower collections or extended payment terms to customers, potentially impacting liquidity.

Overall Financial Insights

The combined data on net sales, accounts receivable, and turnover ratios suggest the company experienced significant growth in sales volumes over the three-year span, accompanied by a corresponding rise in receivables. While the growth phase indicates expanded market activity, the variability in receivables turnover points to challenges in receivables management and cash flow timing. Notably, the decline in net sales in 2025 alongside fluctuating receivables levels and turnovers could reflect market or operational adjustments that require ongoing monitoring.

The cost of sales demonstrates a generally upward trend over the observed periods, with fluctuations attuned to account payable patterns. Starting at approximately 669 million USD in September 2019, it dips moderately in some intervals, such as March 2020, before continuing to rise, peaking around the third quarter of 2024 with values exceeding 5 billion USD. Notably, a substantial escalation in cost of sales occurs from late 2022 through mid-2024, indicating expanded operational scale or cost pressures.

Accounts payable figures reflect a similar growth trajectory, though with more pronounced volatility. Beginning at about 332 million USD as of September 2019, payable amounts increase irregularly, reaching over 1.68 billion USD by the end of 2024. There are intervals where accounts payable decline sharply, for instance, at the end of 2024 where values drop to under 550 million USD, followed by a recovery to above 1.28 billion USD in mid-2025. This volatility may signify changes in payment terms, supplier negotiation dynamics, or working capital management strategies.

Regarding payables turnover, which is reflective of how frequently the company pays its suppliers within a period, the ratio exhibits notable variability across quarters. Initial data points are sparse, but from early 2020 onwards, turnover ratios fluctuate between approximately 4.9 and 9.7 in most quarters. Exceptionally high ratios, exceeding 29 in the final two reported quarters, indicate accelerated payable settlements or altered purchasing behaviors. Such spikes may denote improved cash flow management or temporary strategic supplier payments.

Cost of Sales Trends

Steady increase over the five-year span with marked growth after 2021, potentially driven by increased production or market demand.

Intermittent declines align with certain quarter periods, possibly seasonal or pandemic-related effects.

Accounts Payable Dynamics

Growth trend mirrors cost of sales but with intermittent sharp decreases and gains, indicating fluctuating supplier payment cycles or credit terms.

The steep drop at the end of 2024 suggests a period of accelerated payments or balance sheet adjustments.

Payables Turnover Analysis

Generally stable turnover ratios in the mid single-digit range, reflecting consistent payment timing relative to purchases.

Significant spikes near the end of the data period point to unusual settling speed or changes in operational cash flow practices.

In summary, the company’s financial data reveal an expanding scale of operations and associated costs over time, accompanied by active and variable management of accounts payable. Payable turnover ratios suggest typical operating rhythms, with occasional periods of enhanced payment activity potentially aimed at optimizing liquidity or supplier relations.

Working Capital

The working capital demonstrates a general upward trend over the observed periods, starting from approximately 832 million USD in late 2019 and reaching nearly 10 billion USD by mid-2025. Notable increments occur particularly from late 2022 onward, with a pronounced increase between late 2023 and late 2024, where working capital almost triples within about a year. This suggests a significant enhancement in the company's short-term liquidity position during the latter periods.

Net Sales

Net sales exhibit considerable variability over time, with initial figures around 800 million USD in late 2019. There is a decline in early 2020, followed by a recovery and growth peaking at over 5.9 billion USD by late 2024. However, a subsequent decrease is observed moving into the early part of 2025. The sales pattern indicates a cyclical nature with strong periods of growth, especially from 2021 to 2024, where sales grew more than sixfold, reflecting increased market activity or successful sales initiatives during that timeframe.

Working Capital Turnover Ratio

The working capital turnover ratio shows values only from mid-2020 onward, starting close to 3.77 and generally fluctuating around the range of 3.7 to 4.1 for several quarters. This stability suggests that the company's efficiency in using working capital to generate sales remained consistent through this period. From late 2023, however, the turnover ratio declines sharply to as low as 1.86 in late 2024, indicating a decrease in the efficiency of working capital utilization relative to sales despite the increase in working capital itself. The ratio rebounds slightly by mid-2025 but remains below earlier levels, implying ongoing challenges or strategic shifts affecting sales or capital usage efficiency.

Overall Insights

The data reflects a company with expanding working capital resources and growing sales over the medium term. The peak in sales coincides with maximum working capital levels but is tempered by a decline in capital turnover efficiency, suggesting that the growth in working capital may be outpacing sales growth during the most recent periods. This divergence points to potential overinvestment in working capital or challenges in converting capital into sales at the previous efficiency levels. Monitoring this trend is essential to ensure balance between liquidity and operational efficiency going forward.

Inventory Turnover Ratio

The inventory turnover ratio exhibits noticeable fluctuations over the analyzed periods. Starting near a ratio of 3.3 in the early quarters of 2020, it experienced a gradual decline reaching a low point around 2.5 in mid-2022. Subsequently, there was an improvement with the turnover rising above 3.8 in early 2023, followed by some variability. The ratio peaked substantially toward late 2024 and early 2025, exceeding 5.0, indicating a marked increase in the efficiency of inventory usage during these most recent quarters.

Average Inventory Processing Period

The average inventory processing period showed an inverse but corresponding trend relative to the inventory turnover ratio. Initially, the number of days to process inventory was around 110 in early 2020, gradually increasing to a peak of approximately 146 days in mid-2022, reflecting slower inventory turnover. Starting in late 2022, the processing period decreased significantly to below 100 days in early 2023, suggesting improved inventory management. However, variability persists with short-term increases and decreases, reaching a low of about 72 days near the end of 2024 before slightly rising again.

Summary of Trends and Insights

Overall, the data indicates periods of declining inventory efficiency transitioning into phases of marked improvement. The mid-2020 to mid-2022 interval was characterized by slower inventory turnover and longer processing times, which may imply challenges in inventory management or demand fluctuations. From late 2022 onwards, there is a clear trend toward enhanced inventory turnover and reduced processing periods, peaking significantly by late 2024 and early 2025. This suggests that measures to optimize inventory holding or sales efficiency have been effectively implemented, resulting in better asset utilization and potentially improved financial performance.

Receivables Turnover

The receivables turnover ratio shows some fluctuations over the observed periods. Starting from a level above 8 in late 2019 and early 2020, it peaks around 10.23 in December 2019 and March 2020, indicating more efficient collection of receivables during that period. A subsequent decline follows, with values dropping close to 6.23 by September 2021, signaling a slowdown in turnover efficiency. After this trough, the ratio experiences gradual recovery, reaching near 9.97 by March 2025. This pattern suggests variability in credit management efficiency or changes in sales terms affecting receivables turnover across quarters.

Average Receivable Collection Period

The average receivable collection period inversely correlates with the turnover ratio, as expected. It starts near 44 days in late 2019, decreases to a low of 36 days early in 2020, reflecting quicker collections. From mid-2020 onward, the days outstanding increases, peaking at about 59 days on multiple occasions (September 2021, March 2023, and December 2023), indicating slower collection times during these quarters. Towards the end of the timeline, the collection period decreases again, reaching 37 days by March 2025, implying improved efficiency in collections.

Overall Analysis

Overall, the data reveals cyclical trends in receivables management, with periods of both enhanced and diminished efficiency over time. The variations may result from changing market conditions, credit policies, or customer payment behaviors. The recovery in receivables turnover and the reduction in collection days towards the end of the period reflect positively on the company's efforts or external factors improving cash flow through better receivables management.

The inventory processing period exhibits a fluctuating trend over the observed quarterly periods. Initially, the period decreased from 110 days in late 2020 to a low of 90 days in the first quarter of 2023, indicating an improvement in inventory turnover efficiency. However, this trend reversed from mid-2023, with the period increasing to a peak of 152 days by mid-2024, suggesting slower inventory processing. The final quarters show a decline again, reaching 87 days by mid-2025, which may indicate a recent positive adjustment in managing inventory.

The receivable collection period demonstrates variability but remains within a narrower range. Starting at 44 days towards the end of 2020, it improved to a minimum of 36 days by early 2021, which reflects faster collection efficiency. Nevertheless, the period increased to as much as 67 days by late 2024, reflecting slower receivable turnover and potential challenges in cash collection. The trend improves once more at the end of the dataset, down to 37 days by mid-2025, suggesting recent enhancements in receivables management.

The operating cycle, which incorporates both inventory processing and receivable collections, naturally reflects the combined effects of the two components. The cycle lengthened progressively from 154 days at the end of 2020, reaching a maximum of 203 days in mid-2024, indicating an overall slowdown in the company’s cash conversion efficiency. Towards the end of the observation period, a notable improvement is observed, with the operating cycle decreasing to approximately 124 days by mid-2025, highlighting a faster turnover rate overall.

Inventory Processing Period

Initial improvement seen up to early 2023 followed by deterioration through mid-2024, then renewed improvement.

Receivable Collection Period

Fluctuated moderately, reaching extremes at both lows and highs within the dataset, with a closing trend towards faster collection.

Operating Cycle

Lengthening trend for the first several quarters, peaking mid-2024, then showing a marked reduction towards the latest periods.

In summary, the company's working capital efficiency, as reflected by these metrics, showed periods of strain especially during 2023 and early 2024 when both inventory and receivables turnover slowed substantially. The improvements in the most recent quarters suggest management initiatives may have positively impacted operational efficiency, reducing the cash conversion cycle closer to previous lower levels.

The payables turnover ratio and the average payables payment period exhibit notable fluctuations throughout the observed quarters. Initially, the payables turnover ratio is missing for the earliest periods but becomes available starting June 30, 2020, at 6.74. Over the successive quarters, it generally fluctuates between 4.94 and 9.76, indicating variable frequency in settling payables. A significant upward spike occurs in December 31, 2024, reaching 33.19, which is markedly higher than all previous values, followed by a decline to 29.76 and then 15.24 in subsequent quarters.

Correspondingly, the average payables payment period demonstrates an inverse pattern: it starts around 54 days in June 2020, then varies from a low of 37 days in March 2023 to a high of 74 days in September 2020. This variation reflects changes in the length of time taken to pay suppliers, fluctuating mainly between 37 and 74 days. Starting from December 31, 2024, there is a sharp reduction in the payment period down to 11 days, followed by minor increases up to 24 days by June 30, 2025.

Payables Turnover Ratio

The ratio shows moderate volatility, suggesting inconsistent payment cycles to suppliers. The high peak towards late 2024 implies much faster turnover or quicker payments than previous periods.

Average Payables Payment Period

This metric inversely correlates with the payables turnover ratio, indicating the number of days taken to fulfill payment obligations. The significant decrease to near two weeks or less in late 2024 implies a strategic shift towards expedited payments or improved cash management.

Overall Trends and Insights

The fluctuating payables turnover and payment periods throughout the timeline suggest the company has experienced varying payment practices or changes in supplier terms. The abrupt increases in turnover ratio and corresponding decreases in payment periods at the end of the dataset may denote an operational change to accelerate payments or reflect a short-term cash position adjustment.

Average Inventory Processing Period

The average inventory processing period displays a fluctuating but generally increasing trend from September 2020 through June 2022, moving from 110 days up to a peak of 146 days. After this peak, a notable decline occurs through March 2023, reaching 90 days, followed by intermittent rises and falls, with another peak at 152 days in September 2024. Toward the end of the observed timeline, the period decreases again, reaching 74 to 87 days by June 2025. This pattern indicates variability in inventory turnover efficiency, with occasional improvements but also periods indicating slower inventory movement.

Average Receivable Collection Period

The receivable collection period shows moderate variability with several fluctuations over time. Starting at 44 days in September 2020, it decreases to 36 days by December 2020 and March 2021, then experiences increases reaching up to 59 days in June 2022 and September 2023. Periods of lower collection days, such as 37 days in March 2023 and 37 days again in June 2025, indicate temporary improvements in receivables management. Overall, however, the trend oscillates without a clear directional movement, suggesting inconsistent collection efficiency.

Average Payables Payment Period

The payables payment period exhibits considerable fluctuations. Starting at 54 days in September 2020, it decreases significantly to 44 days in December 2020 but subsequently rises to a high of 74 days in September 2021. Following this peak, the period declines substantially to single-digit levels by March 2025, hitting as low as 11 and 12 days, before slightly increasing to 24 days by June 2025. The sharp decline in payables payment days toward the end suggests a shift towards faster payments to suppliers, potentially impacting cash outflows.

Cash Conversion Cycle

The cash conversion cycle (CCC) shows noticeable variation, with values generally ranging between 90 and 163 days. Starting at 100 days in September 2020, the CCC increases to 128 days by June 2021 and peaks at 163 days in September 2024, indicating prolonged working capital tied up in operations. Periods of decline, such as the drop to 100 days in March 2023 and June 2025, reflect improved operational efficiency and better cash flow management. The overall pattern suggests cycles of increased capital tie-up followed by efforts to reduce the operating cycle length.