Super Micro Computer(SMCI) - 2025 Q3 - Quarterly Report

Financial Performance - Net sales increased by 19.5% to $4,599.9 million for the three months ended March 31, 2025, compared to$3,850.1 million for the same period in 2024[213]. - Gross margin decreased to 9.6% in the three months ended March 31, 2025, down from 15.5% in the same period of 2024[213]. - Operating expenses rose by 33.9% to $293.4 million for the three months ended March 31, 2025, compared to$219.1 million in 2024[213]. - Net income for the three months ended March 31, 2025, was $108.8 million, a decrease from$402.5 million in the same period of 2024[207]. - For the three months ended March 31, 2025, net sales increased by $749.8 million, or 19.5$4,458.9 million, a 20.6% increase from $3,698.5 million in the same period of 2024[228]. - Net income for the three months ended March 31, 2025, was 2.4$589.7 million, or 77.1%, for the three months ended March 31, 2025, primarily due to growth in Japan and Thailand[234]. Expenses and Costs - The cost of sales for the three months ended March 31, 2025, was $4,159.7 million, a 27.9$3,252.7 million in 2024[236]. - Total operating expenses as a percentage of revenue increased to 6.4% for the three months ended March 31, 2025, compared to 5.6% in 2024[226]. - Research and development expenses increased to $162.9 million for the three months ended March 31, 2025, compared to$116.2 million in 2024[225]. - Sales and marketing expenses rose by $10.3 million (20.7$60.0 million for the three months ended March 31, 2025, primarily due to increased employee-related costs and advertising expenses[244]. - General and administrative expenses increased by $17.4 million (32.8$70.5 million for the three months ended March 31, 2025, mainly due to higher professional and service fees[245]. - Total operating expenses for the three months ended March 31, 2025, were $293.4 million, a$74.3 million (33.9%) increase compared to the same period in 2024[240]. - Research and development expenses increased by $46.7 million (40.2$162.9 million for the three months ended March 31, 2025, driven by workforce expansion and product development costs[242]. Tax and Interest - The effective tax rate increased to 5.1% in the three months ended March 31, 2025, from (5.2)% in the same period of 2024[213]. - The effective tax rate for the three months ended March 31, 2025, was 5.1%, compared to (5.2%) for the same period in 2024, reflecting changes in stock compensation tax deductions[256]. - Interest expense increased by $7.2 million (116.1$2,634.1 million for the nine months ended March 31, 2025, compared to the same period in 2024, primarily due to a significant increase in working capital[262]. - Cash and cash equivalents were $2.5 billion as of March 31, 2025, up from$1.7 billion as of June 30, 2024[258]. - Net cash provided by financing activities decreased by $3,478.2 million for the nine months ended March 31, 2025, primarily due to reduced proceeds from the issuance of common stock[264]. - The company closed the offering of$700.0 million aggregate principal amount of 2028 Convertible Notes on February 20, 2025[266]. - As of March 31, 2025, the outstanding principal indebtedness under credit facilities was $107.0 million[271]. Market and Economic Factors - The growing demand for AI and data center capabilities is expected to drive further product demand and market expansion[211]. - Macroeconomic factors such as labor shortages and supply chain disruptions may impact future financial performance[212]. - Future capital requirements will depend on growth rate, development spending, and expansion of sales and marketing activities[268]. - The company will continue to evaluate new business opportunities and markets, which may dictate additional facilities and capital expenditures[267]. - A 10$45.0 million to $55.0 million, primarily for global manufacturing capabilities and new product tooling[267].